As we reach the end of 2024, we can look at Q3 of this year to see what the state of Solana has been. Recently, Messari released a research paper written by Matthew Nay outlining the key takeaways from Solana’s progress in Q3 of 2024. In this summary, we will summarize and analyze some of the most significant points from this report.
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1. The Solana Ecosystem Is Growing Rapidly
The report begins with a chart showcasing various metrics such as DeFi TVL (total value locked), average daily DEX volume, stablecoin market cap and more. One of the most eye opening metrics to notice was the increase of DeFi TVL from $0.4 Billion in Q3 of 2023 to $5.6 Billion just one year later in Q3 of 2024. This indicates a significant growth and adoption of the Solana ecosystem.
Another notable metric is the daily DEX (decentralized exchange) volume, which was less than $1 Billion this time last year but has now reached over $1.7 billion. This shows a strong increase in trading activity on Solana-based DEX platforms. As more people enter into decentralized exchanges on the Solana network, it solidifies the blockchain’s capabilities of being a fast and efficient platform for trading.
Despite this impressive growth, there is an area mentioned that has declined during Q3 of this year and that’s the average daily minted cNFTs and the average daily NFT volume. During the peak of this activity in Q1, we witnessed $7.6M average daily NFT volume but it has since dropped down to $2.5 million. There was also only 492,000 cNFTs minted during this quarter which indicates a significant decrease.
However, this decline could also be seen as a sign of maturity in the NFT market on Solana. As the ecosystem continues to grow and stabilize, we can expect fluctuations and corrections in certain metrics. There is still more than twice as much average daily NFT volume than Q3 last year, so short term decreases do not reflect the growth when we look at it from a broader perspective.
2. Jupiter Soars as Solana’s Star Project
This report also showed a helpful map of the Solana ecosystem showing different aspects such as DeFi projects, DePIN, Consumer, Community, Infrastructure, Payments and Experimental. By having a diverse ecosystem, Solana is able to cater to different needs and use cases, making it a well-rounded blockchain platform. This also shows the potential for future growth and development in various industries and sectors on Solana.
Although each sector is growing, DeFi was highlighted with a 26% QoQ growth to $5.7 billion.
Jupiter in particular experienced the most significant increase in Total Value Locked (TVL), with a 75% growth rate quarter-over-quarter, reaching $749 million and capturing a 13% market share. This is in part attributed to the Jupiter team showcasing their mobile app at BReakpoint, which went live early in Q4. The app allows users to onboard easily with Apple Pay, Google Pay, or credit cards.
“Jupiter perpetuals averaged a daily trading volume of $505 million, marking a 27% increase quarter-over-quarter, and concluded the quarter with a commanding 60% market share.”
Matthew Nay
The Jupiter team has also acquired SolanaFM, a Solana explorer, along with Coinhall, the leading aggregator on Cosmos. This empowers the team to provide a more seamless and comprehensive user experience for the Jupiter ecosystem. These acquisitions and product launches are quickly positioning Jupiter as a potential leader in the DeFi space on Solana.
3. The Infrastructure Has Made Significant Improvements
In the third quarter, significant infrastructure advancements have marked the landscape. For one, Embedded Wallets through Phantom’s efforts are now allowing users to create wallets with just an email, Google account, or Apple account. By simplifying the onboarding process, this removes yet another barrier to entry for Solana.
Introduced by Light Protocol and Helius at the end of June, ZK Compression went live on the mainnet on September 18. Functioning similarly to compressed NFTs, it stores account data in an offchain Merkle tree and posts its root onchain, applicable to any token or account. Utilizing SNARKs for compressing Merkle proofs, it enhances verification efficiency.
When it comes to airdrops, the benefits of ZK compression were demonstrated. Helius launched AirShip at September’s close. As Nick from Helius remarked, “This platform provides the simplest, fastest, and most cost-effective means to mass-airdrop tokens, targeting Solana mobile holders, NFT collections, various token holders, and CSV address lists.”
4. The Network and User Base Continues To Show Strength
Despite the growth of dApps, better infrastructure and overall improvements, the growth of users needs to be a priority. For Solana to continue its trajectory in the DeFi space, it needs to attract new users and retain existing ones. This is because users pay a fee which incentives validators to secure the network.
To show this metric, Messari created a graph depicting the growth of the average daily fee payers over the past year. There was a growth of 109% which proves that the user base is steadily increasing, and thus, the network is becoming more secure and profitable for validators. With a major jump at the end of August, we can see that the network is reaching a tipping point, where more users are discovering the benefits of using Solana and contributing to its growth.
“In Q3, Colosseum held its Radar Hackathon with 1,359 project submissions. Winners will be announced in Q4. The full list of projects is live.”
Matthew Nay
To close off the report, a view of the circulating market cap puts a stamp on the network’s success. As of Q3 of 2024, the circulating market cap was reported at $71.4 billion, a major increase from $8.8 Billion just one year ago. With a significant increase in market cap over the past year, Solana continues to attract investors and projects looking to build on its high-performance blockchain.
Final Thoughts
Solana is living up to its hype and continues to prove its technical capabilities. The network’s growth in users, market cap, and infrastructure development shows that it has a strong foundation for future success. Leaders such as the Jupiter team along with network effects and overall better infrastructure underpinning the development of the ecosystem are also contributing to the growth of Solana. Although this blockchain has had its bumps and rough turns, the roadmap of Solana is poised for even more growth and adoption in the years to come.
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