The investment company VanEck believes that in the coming year, the project will take third place in capitalization among crypto projects

Binance analysts noted the outperforming growth of the Solana ecosystem compared to other L1s

08.12.2023 - 14:22

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3 min

What’s new? Experts of the analytical division of the Binance crypto exchange prepared a report on changes in the state of the crypto market. There they noted the growth of its capitalization by 110% since the beginning of the year and by 55% in the current quarter. They also reported the end of an eight-month downtrend in NFT trading volumes: the indicator grew by 200% in November, with bitcoin becoming the most popular blockchain (it overtook the main competitor, Ethereum, by $27 million). Ethereum also shows weaker results in comparison with alternative Layer 1 (L1) protocols for smart contracts. In particular, Binance Research noted the outpacing growth of the Solana network.

Report by Binance Research

What else is known? Although Ethereum remains the main L1 platform for smart contracts, it has been surpassed in terms of profitability by several projects this year, the most notable of which is Solana. For example, the capitalization of its native token SOL increased by 56% in November alone

Solana was hit hard by the bankruptcy of FTX last November: the exchange was the largest investor in the project. Despite this, the developers have continued to release new products and improvements, leading to renewed optimism for the project.

For example, Solana’s network experienced at least three major outages in 2022, while only one such incident was recorded this year. The situation is expected to improve after the release of the independent client-validator, Firedancer.

The total value locked (TVL) of Solana-based decentralized financial projects also grew much more compared to its main competitors (by 57% over the month). Much of the growth was driven by airdrops from ecosystem projects such as the oracle Pyth Network, the exchange aggregator Jupiter Exchange, and the liquid staking protocol Jito Network. And projects like MarginFi and Kamino Finance announced the launch of reward programs.

Solana-based BONK has become the third-largest “dog” meme token ever created

Solana-based BONK has become the third-largest “dog” meme token ever created

The capitalization of the asset grew by more than 36% per day

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Earlier, analysts at the investment firm VanEck predicted in their New Year’s Eve report that Solana will become the third blockchain by market capitalization. As of December 8, 13:50UTC, SOL ranks sixth and is trading on Binance at $73,35, having added 15% over the day.

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