Solana's TVL Achieves All Time Highs

Solana's TVL reaches new high in 2023, driven by popular projects and SOL token performance. Concerns arise over potential impact of FTX estate's liquidation.

Oct 2, 2023 - 17:32
Oct 19, 2023 - 14:39
Solana's TVL Achieves All Time Highs
Reading time - 2 min

Solana's TVL has witnessed a remarkable surge, reaching a new high for 2023 at $338.82 million. This growth represents a 24-hour increase of around 4.15%, escalating from $324.64 million. Since the onset of 2023, the TVL has seen a substantial rise of approximately 38%, up from $210.47 million on January 1.

Solana total value locked (TVL) 2023. (Source: DefiLlama)

However, it's essential to understand that this isn't Solana's first tryst with high TVL numbers. Back in November 2021, Solana's TVL had soared to just over $10 billion before experiencing a significant decline, bottoming out at $210 million in January 2023.

Several factors have contributed to the recent surge in Solana's TVL:

  1. Popular Solana-based Projects: Projects like Drift, marginfi, and Solend have been instrumental in pushing the rise in TVL. These projects have garnered significant attention and investment, reflecting the growing trust in Solana's ecosystem.
  2. SOL Token Performance: The native SOL token has reported its most robust week since mid-July. The token has witnessed a 29% rise over the past week and has surged by 39.08% from its September low. At the time of writing, SOL is trading at $24.42, marking a 65% jump from its lowest price in 2023.
  3. Network Reliability and Upgrades: Solana has been focusing on enhancing its network reliability through upgrades like Quick and local fee markets. Furthermore, its recent partnership with Visa to settle transactions in USDC on Solana could potentially enable merchants to receive instant payments and save on credit card processing fees.

Concerns arise regarding the potential impact on SOL's price, especially with the FTX estate's recent approval to liquidate its crypto holdings. The estate reportedly holds about $1.2 billion in SOL. Of this amount, as much as 22 million SOL tokens, valued at approximately $400 million, are unlocked and can be sold. This represents nearly 4% of SOL's total supply.

Additionally, another 40 million to 44 million tokens, valued at around $860 million, are currently staked, with an estimated $17 million worth of SOL tokens expected to be unlocked every month for the next four years.

SOL Price Chart.

Solana was among the projects most affected by the FTX collapse. The Solana Foundation revealed that it had around $1 million in cash or similar assets with FTX until November 6, 2022, before the platform halted customer withdrawals, representing less than 1% of its total funds.

Philip Bohmer Philip is a seasoned journalist that brings clarity to the complex world of cryptocurrencies through his articulate and insightful articles. His passion for blockchain technology fuels his writing, making him a trusted voice in the rapidly evolving digital currency landscape.