When Solana’s price hit new lows near $54, the total value locked (TVL) for the token also declined to a historical low. According to data from Defi Llama, the token’s TVL has been on a steady decline since November 2021. In that month, it reached an all-time high of $15 billion but then lost momentum and went down to $4.34 billion.
Solana’s TVL continued to plummet in the third week of May due to bearish trends within this market that have seen declining interest from investors.
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With its price struggling to find footing, it’s been one of the best-performing crypto projects in recent months. However, the research says that Solana has lost 60% in total value locked since January first day of 2022, trapped inside a bear market pattern.
To be exact, on January 1st, Solana’s TVL was approximately $11.22 billion, but by May 16, it had fallen to around $4.38 billion.
Solana is a blockchain that helps create user-friendly applications that are very scalable. As the fastest growing ecosystem in the crypto finance space, Solana has thousands of projects under Web3, non-fungible tokens (NFTs), and DeFi.
Reason Behind The Decline in Solana Total Value Locked
This week, the Solana TVL reached new lows due to the number of decentralized applications (dApps) in its ecosystem plummeting.
For example, the Tulip yield aggregation platform has shed more than 11% of its TVL in the last month. Likewise, the Solend decentralized lending and borrowing platform have also fallen by more than 8% within the same timeframe.
With the value of both projects locked up, Staking platform Marinade Finance and decentralized exchange (DEX) protocol Serum have lost more than 48% and 42%, respectively.
Saber, Raydium, Orca, Atrix, Quarry, Francium, and Mango Markets are the other dApps caused a decline in the total value locked.
Solana is still keeping the fourth position with the most locked value blockchain. Despite plummeting by more than $6 billion in 2022.
Solana still reigns supreme in value locked over Cardano, TRON, Fantom, Polygon, Cronos, Near, Waves, DefiChain, Harmony, and Osmosis. However, Ethereum, BNB, and AVAX sit at the top of their game.
Meta Platforms has announced that Solona will be integrated with Instagram. This means that Solona’s non-fungible tokens (NFTs) will be usable on the social media platform. Other platforms that have been named for this integration are Polygon and Ethereum.
When SOL opened the year, it was priced at $170.31; by Jan 2nd, the coin reached its yearly high at $179.43. As of May 16, SOL is trading at $ 55.38 per coin. This means that the price has decreased by 67% since the start of the year.
Featured image from Flickr, and the chart from Tradingview