Solana TVL dips 50%; What went incorrect and when?
Solana [SOL] was trading at a high of $143.5 on April 2nd. However, the 8th-ranked alt is currently down by around 54%. SOL was only worth $53 at the time of publication. Similarly, Serum [SRM], the ecosystem's second native token, has lost more than half of its value—approximately two-thirds—during the same time frame, falling from $3.6 to $1.3.
What made Solana, Serum's bearish problems worse?
Solana and Serum's negative problems were exacerbated by the market's recent performance. Their basic legs, on the other hand, began to tremble and contributed to the problem.
Consider the overall amount of data stored on the protocol. On April 2nd, the assets on Solana were valued moreover $8 billion in total. At publication time, the figure had dropped to roughly $4.3 billion. On any particular day, a drop in liquidity isn't a good indicator.
Source: DeFiLlama
When examined further, it was discovered that Solana's dApps were to blame for the drop. For starters, data from DeFiLlama revealed that Solana's decentralized lending and borrowing platform Solend had had a TVL drop of almost 10% in the last month, while yield aggregator Tulip had lost more than 11% of its TVL in the same timeframe. Marinade Finance's drop in this area reached over 33%, while Serum's scars were 22% deep.
In the DEX market, the serum is also on the decline. It had a 4.3 percent market share in February, but today it just has a 2 percent share. This has been aided by the dismal exchange activity.
The volumes traded on this Solana-based DEX were hovering around $400 million during the first few days of April, as seen below. Following that, the market took a fall before remaining flat until the first week of May.
The figures improved in the second week, but the exchange-traded volume was still only $73.9 million at press time.
Source: CoinGecko
The value of assets locked on Solana's cross-chain Wormhole bridge has also been declining recently, contributing to the pessimistic thesis' refinement.
Both of these coins have done exceptionally well whenever the Solana ecosystem has prospered in the past. Last year, there was a period when these two tokens resisted the overall market trend and continued to rise primarily due to their ecosystemic benefits. Solana-Serum will only be able to permeate sunshine into the ecology after they pull up their essential socks.