Solana’s Active Wallets Surge 20% Despite 40% DeFi TVL Decline
1min read Solana’s ecosystem is experiencing a surge in active wallet addresses, indicating a significant increase in user engagement. Despite this growth, the Total Value Locked (TVL) in Solana’s decentralized finance (DeFi) sector has seen a notable decline, reflecting a complex market environment. This discrepancy suggests that while users are actively participating in the network, the overall value locked in DeFi protocols is decreasing, possibly due to broader market conditions or shifts in investor sentiment.
According to recent data, the number of addresses holding 0.1 sol or more has risen from around 9.2 million in late December to over 11 million by March 21. This increase in the user base demonstrates sustained interest in the Solana ecosystem, even as the price of SOL has dropped from a high of $180 in January to approximately $129.54. This divergence implies that retail investors may be accumulating SOL in anticipation of future price increases, despite the current price correction.
Conversely, the TVL on Solana has declined from a peak above $11 billion in January to approximately $6.4 billion recently. This contraction in DeFi activity is likely influenced by macroeconomic volatility and broader market trends. However, it is important to note that the current TVL level remains significantly higher than the pre-bull market baseline of 2023, indicating that Solana’s DeFi ecosystem continues to hold traction despite these challenges.
At the time of this report, SOL was trading below both the 50-day moving average ($135.50) and the 200-day moving average ($188.05), suggesting a broader bearish trend. However, the Accumulation/Distribution Line shows consistent upward movement, indicating that institutional and smart money investors may be taking positions at the current price levels. With relatively low trade volume and resistance around the $135 mark, price action may remain rangebound in the immediate future. Nevertheless, ongoing on-chain growth could serve as a catalyst for potential upward movements.
Solana has been demonstrating robust underlying demand, even as speculative trading declines. If the price eventually aligns with the strengthening network dynamics, SOL could be positioned for further price gains ahead. In summary, while Solana’s network activity and user adoption are on the rise, the concurrent decrease in TVL suggests a nuanced market scenario. As smart money accumulates, the potential for price recovery remains plausible, provided that vital network fundamentals persist.
Ask Aime: What is the significance of Solana's growing user base amid declining DeFi TVL?
