Solana DeFi ecosystem rallies amid strong headwinds

The Solana blockchain achieved a yearly high in the total value of assets locked (TVL) at $335 million on Oct. 2, as reported by DeFillama data.

As of the latest data available, the TVL has dipped slightly to $329.59 million. However, this increase underscores the recent influx of investors into the network’s decentralized finance (DeFi) ecosystem.

This surge is a notable departure from the previous year’s trend. In 2022, Solana’s DeFi TVL experienced a gradual decline, influenced by the decreasing value of SOL and the broader market downturn. Concerns regarding the project’s association with bankrupt FTX further exacerbated this decline.

However, the network has enjoyed some growth this year and has seen its TVL climb from $210 million to the current levels. This represents an increase of close to 40% on the year-to-date metrics.

It’s worth noting that, despite this recent growth, Solana’s DeFi TVL remains significantly below its all-time high, which exceeded $10 billion during the peak of the 2021 bull market. During that time, the Solana blockchain was widely touted as a potential “Ethereum killer.”

Solana still faces major headwinds.

Solana’s ecosystem is enjoying notable growth this year, scoring adoptions from Visa, Shopify, and other major traditional institutions. However, the blockchain network still faces major challenges.

Solana’s SOL token was one of the numerous digital assets the U.S. Securities and Exchange Commission (SEC) labeled as securities in its legal actions against major cryptocurrency exchanges, including Binance and Coinbase.

This classification led to the prompt removal of the asset by several trading platforms like Revolut, Bakkt, and others.

Besides that, the network’s token still faces significant selling pressure ahead as the Court has approved the bankrupt FTX move to sell its substantial digital asset holdings, which includes an over $1 billion position in SOL.

These issues have contributed significantly to the struggles SOL’s price has faced this year. As of press time, SOL was trading for $23.06, up by more than 133% on the year-to-date metric, per CryptoSlate’s data.

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