On 2 April, Solana [SOL] was trading at a level as high as $143.5. However, at the moment, the 8th-ranked alt is already down by approximately 54%. At press time, SOL was merely valued at $53. Similarly, the ecosystem’s other native token Serum [SRM], had also lost more than half of its value—approximately two-thirds, to be precise—in the same period and was down from $3.6 to $1.3.
What intensified Solana, Serum’s bearish woes?
Well, the state of the market over the past week did add up to Solana and Serum’s bearish woes. Alongside, however, their fundamental legs too started quivering and contributed to the said cause.
Consider the total value locked up on the protocol, for instance. On 2 April, the cumulative worth of the assets on Solana was worth more than $8 billion. However, the same was down to around $4.3 billion at press time. The fall in liquidity, on any given day, ain’t a healthy sign.
When deep-dived, it was analyzed that Solana’s dApps had triggered this dip. Data from DeFiLlama brought to light that Solana’s decentralized lending and borrowing platform Solend, for starters, had noted a TVL dip of approximately 10% over the past month, while yield aggregator Tulip peeled more than 11% of its TVL in the same timeframe. Staking platform Marinade Finance’s dip on this front extended to almost 33%, while Serum’s scars were 22% deep.
The serum is on a slippery slope in the DEX market too. Back in February, for instance, it had a 4.3% command in the market, but now it barely has a 2% say. The lackluster exchange activity has contributed to the same.
As can be seen from below, during an initial couple of days of April, the volumes traded on this Solana-based DEX were hovering around the $400 million mark. Post that, the same witnessed a dip and then remained flat until the first week of May.
In the second week, the numbers did recover, but at press time, the exchange-traded volume reflected a reading of merely $73.9 million.
The value of the assets locked on Solana’s cross-chain Wormhole bridge has also been shrinking of late, playing a part in fine-tuning the bearish thesis.
Whenever the ecosystem Solana ecosystem has thrived in the past, both these tokens have fared substantially well. There was a point in time last year when these two tokens defied the broader market trend and kept inching higher solely on the back of their ecosystemic positives. So now, only when Solana-Serum pulls up their fundamental socks, would sunlight manage to seep into the ecosystem.
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