Solana (SOL) recorded an impressive increase of 24.8% from May 6 to 10, thanks to a strong price surge of altcoins after Bitcoin surpassed the $100,000 mark. Although SOL is currently struggling to maintain prices above $180, derivative and on-chain data still signal positivity, indicating that SOL still has significant growth potential.
Although Solana currently ranks 5th in market capitalization in the cryptocurrency world, in terms of on-chain activity, the network is asserting its position by standing 2nd in total value locked (TVL) – a key metric reflecting the strength of the DeFi ecosystem.
With a total value locked (TVL) of $10.9 billion, Solana has surpassed the entire Ethereum layer 2 ecosystem – including platforms like Base, Arbitrum, and Optimism. Even BNB Chain, which is closely integrated with Binance and Trust Wallet, could not keep pace with Solana's strong growth. Over the past 30 days, a series of DeFi protocols on Solana have recorded impressive TVL growth: Raydium DEX increased by 78%, the liquidity staking platform Jito rose by 41%, and Marinade surged by 56%. These figures indicate that the Solana ecosystem is booming with increasing appeal from investors.
Revenue from fees increases demand and momentum for SOL
Attracting cash flow into the DeFi ecosystem does not directly correlate with increasing demand for the network's native token, especially in the context of many blockchains adopting extremely low transaction fees. However, transaction fee data remains an important indicator of actual usage. Over the past 30 days, the Ethereum network recorded only $24.9 million in fees on the base layer, while Tron achieved $51.9 million and Solana ranked just behind with $43.3 million – according to statistics from DefiLlama. These figures reflect a high level of interaction and dense activity on Solana, despite the low transaction costs that are one of the network's strengths.
Revenue from decentralized applications (DApps) along with transaction fees on the Solana network has continuously grown steadily over the past 4 weeks, nearing peak levels in the last 3 months. This is a positive signal for SOL's price, as it reflects the increasing actual usage – a direct factor driving demand for the native token. Moreover, with about 65% of the SOL supply being staked, selling pressure in the market has significantly decreased, creating favorable conditions for a price uptrend.
To assess market sentiment, particularly traders' expectations regarding SOL's price outlook, monitoring the demand for leverage is an important indicator. A positive funding rate indicates that Long positions (buyers) are willing to pay fees to maintain their trades, reflecting confidence in the potential for short-term price increases.
Currently, the funding rate of SOL perpetual futures contracts is at 8% – within the neutral range of 5% to 10%, reflecting stable capital costs and no signs of excessive enthusiasm from leveraged investors. However, with SOL's price still about 40% lower than its historical peak of $295 reached on January 19, market sentiment remains relatively cautious.
Nevertheless, on-chain metrics indicate that activity on the Solana network is accelerating rapidly – a potential signal for SOL's price to soon reach the $200 mark and possibly outperform many other competitors in the market.
The specific catalysts to trigger the next price surge have yet to be clearly identified, but potential launchpad factors include: the possibility of the U.S. approving a spot Solana ETF, SOL being added to the digital asset reserves of states, or an increase in the trend of tokenizing traditional assets on the Solana blockchain – a field that many analysts believe will create significant value for the ecosystem and the SOL token.
