Insights into Growth and Trends of Solana (SOL) blockchain (May 2024)
Discover how Solana, one of the leading blockchain platforms, fared in April 2024. Dive into key metrics revealing the platform’s strengths and challenges, from a thriving dApps ecosystem and stable network validators to fluctuations in user activity and transaction fees. Gain valuable insights to inform your decisions and stay ahead in the dynamic world of blockchain technology.
Below is presented the Latest analytics on Solana blockchain for April 2024.
Visit blockchainmetrics.online for more analytical materials.
Solana (SOL) — based on the results of April 2024 Solana takes 4 place in the ranking of leading blockchain platforms, based on the sum of key indicators. These key indicators are presented below.
These key indicators are presented in the infographic:
(1) dApps ecosystem TVL.
This metric indicates how developed the ecosystem of decentralized applications on this blockchain is and how valuable this ecosystem expressed in fiat money. And although, of course, changes in the metric are still in most cases a reflection of speculative sentiments, stable growth over a long period of this metric indicates the growing broad adoption of the blockchain.
We are observing a decline in the total value locked (TVL) in decentralized applications (dApps) on the Solana network as of April. This decline is -14.8% compared to the previous month. This may be a result of various factors, such as market conditions, technological advancements, or regulatory changes. It is important to monitor the situation and gather data to better understand the cause of the change.
This is a negative signal, for which Solana in April 2024 has gained -1 points of the platform development dynamics index.
(2) Average number of daily active wallets.
This is an absolute customer metric. This metric directly indicates whether more and more people are using the platform or, conversely, whether the platform is experiencing an outflow of real active users.
Speaking of the change in the average daily active wallets metric for the Solana blockchain, it is worth noting that in April of this year, there was a decrease of -9.22% compared to the previous month. It is important to keep an eye on this metric as it can be a sign of market trends or changes in user behavior. We will continue to closely monitor this metric and provide updates.
This is a negative signal, for which Solana in April 2024 receives -1 points of the platform development dynamics index.
(3) Transaction volume.
This is another customer activity metric. This metric shows how actively existing users are utilizing the platform. Which is also an indicator that speaks about the current model of use of the platform, how often on average one active wallet makes transactions. An increase in transaction activity is always good, but a decrease indicates negative trends.
During the last month, the total transactions on the Solana network have increased by 4.32% compared to the previous month. This upward trend is a positive indicator for the health and activity of the network. It indicates that the Solana blockchain is experiencing growth and development. However, it is important to note that this metric is influenced by various factors, and its interpretation requires careful analysis.
This is a positive signal, for which Solana in April 2024 receives +1 points of the platform development dynamics index
(4) Fees & average transaction fee, in native token
For every operation performed by a user on the blockchain, be it a transfer of cryptocurrency from one wallet to another, a purchase on the Internet or an exchange of cryptocurrencies, the blockchain takes fees in the native tokens of this blockchain. On the one hand, high fees hinder user activity. On the other hand, high fees secures high income for the platform and high rewards for validators. This fosters the development of the platform. The total fees & avg transaction fee, in native token, metrics are tightly related. They may differ in value, but always have the same direction. If the average fee in native tokens increases, then the total volume of platform fees also increases. And vice versa. If fees in native tokens increase, this is a good signal for the development of the platform. These are direct incomes of the platform and platform validators. The higher this value, the more interesting it is for the community to develop this platform. It is important for you, as a consumer of the services of this blockchain (whether it is the active use of decentralized applications or simply investing in a blockchain token), to see that income is growing. However, it is important to maintain a balance so that the growth of fees remains within reasonable limits.
Unlikely that the recent 24.79% decrease in total fees on the Solana network is a one-off event. This drop in fees could be an indicator of a more significant shift in the network’s dynamics, and it warrants further investigation. It is important for the community to monitor the situation and potentially explore potential solutions to address any underlying issues that may be causing this shift.
This is a negative signal, for which Solana in April 2024 receives -1 points of the platform development dynamics index.
(5) Average transaction fee, USD
As we noted above, for every operation performed by a user on the blockchain, be it a transfer of cryptocurrency from one wallet to another, a purchase on the Internet or an exchange of cryptocurrencies, the blockchain takes fees in the native tokens of this blockchain. And we also noted that the fees growth in native tokens is good, because it fosters incentive of the community and validators to participate in the development of the platform. But from the point of view of the average user, high fees in USD hinder activity. Users are not interested in increasing fees expressed in fiat currency. High transaction fees in USD value can stunt the development of any blockchain.
For Solana blockchain, this month turns out to be quite unusual. According to the latest reports, the average fee in USD has dropped by 33.75% compared to the previous month. This change is certainly worth noting and evaluating. It is clear that the dynamics of the network activity and the market conditions have played a significant role.
This is a good incentive for the platform’s daily users. And here, we can assign Solana 1 points of platform development dynamics index in April 2024.
(6) Number of validators
The more validators, the more decentralized the blockchain is. An increase in the number of validators foster the reliability and stability of the platform. Moreover, Overall, while increasing the number of network validators may not directly correlate with transaction costs, it has the potential to impact network dynamics in ways that the increase of validators might alleviate pricing pressures due to high demand on block space and improve overall network performance. Therefore, it is extremely important for ordinary users to see that the number of blockchain validators is growing steadily.
In April, the active validators metric for the Solana blockchain changed by 1.63% compared to the previous month. This indicates a healthy network activity and suggests that the validator count remains stable. It is reassuring to see that the network continues to function as expected.
This is a positive signal, for which Solana in April 2024 receives +1 points of the platform development dynamics index.
(7) Number of decentralized applications
The more developed a blockchain has an ecosystem of decentralized applications that offers users a wide range of opportunities that go beyond simple peer-to-peer transactions or currency exchange, the more users make daily transactions on this blockchain. This in turn increases the income of the blockchain and validators and contributes to the further development of the blockchain. Therefore, from the point of view For an outside observer, seeing that the number of decentralized applications is constantly increasing is a positive signal, suggesting an inevitable increase in active wallets and transaction volume.
As we can see in the picture, the number of valuable dApps on the platform during April, 2024 increased by 20.05%:
We are observing a positive trend in the dApps ecosystem development on the Solana blockchain over the last three months. This metric has increased by 28.66% in March, 46.71% in February, and 40.31% in April compared to January. This indicates a steady growth in the popularity and performance of projects on this blockchain network. It is encouraging to see that the ecosystem is developing and attracting more attention from developers and users alike..
This is a strong positive signal, for which Solana in April 2024 receives +2 points of the platform development dynamics index.
(8) Diversity of decentralized applications
It is no secret that the DeFi sector currently dominates the blockchain industry.
A developed ecosystem of decentralized applications, not limited to just one DeFi sector, with a high degree of diversity attracts users with diverse interests. If applications from other categories appear among the leading decentralized applications by metrics for the month, this indicates that the platform is finding other niches and attracting not only traders. In current realities, this is an important indicator of blockchain development.
Among leading dApps on Solana, only dApps of the DeFi category dominate. These applications offer a wide range of decentralized financial services, including lending, borrowing, trading and yield farming, among others. But it is worth mention that lack of diversity in use cases can limit the long-term growth and sustainability of the platform. To date, Solana has done little to diversify its dApps ecosystem. So, no points for this metric Solana receives. 0 points.
(9) Unexplained anomalies
Sometimes when watching over at the metrics and statistics of blockchains and dApps, you come across the fact that a particular indicator may inexplicably experience a sharp increase, and then an equally sharp and illogical drop to the previous level. An example of such a situation is a multiple increase in active wallets without a noticeable increase in transaction activity within a single month.
This indicates manipulation with indicators. This means that something is not going as expected with blockchain. The purpose of such manipulations is different, but this is a bad signal for ordinary users.
No unexplained manipulations with metrics were recorded on the Solana blockchain in April 2024. Therefore, Solana blockchain does not receive a penalty point for this metric. 0 points.
Summary report
The maximum possible score for a blockchain can be 7 * 2 + 1 = 15 points
The minimum possible score for a blockchain can be 7 * (- 2) — 1 = — 15 points
Total platform development dynamics index for Solana in April 2024 is 2.
To sum everything up, from all these observations, several positive and negative signals can be identified for all those interested regarding the evolving track of the Solana blockchain:
Positive signals:
1. Increase in Number of Decentralized Applications (dApps)
The number of valuable dApps on the Solana platform increased by 20.05% in April 2024. A growing number of dApps indicates a vibrant ecosystem, offering users various opportunities and services. This diversity attracts more users and increases overall platform activity. Users can expect more choices and functionalities within the Solana ecosystem, enhancing their experience and encouraging more usage.
Negative signals:
1. Drop in Transaction Fees (in native token)
Total fees in native tokens decreased by 24.79% in April 2024. While lower transaction fees benefit users directly, a significant drop might indicate underlying issues in the platform’s economics or user activity. It could potentially affect the platform’s revenue and sustainability.
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