Popular open-source blockchain Solana, which helps smart contracts, has recorded notable market performance in the past months. According to data from crypto analytics platform Messari, Solana’s NFT sales volume made it the second largest protocol at the end of the quarter, with leading altcoin Ethereum in first place.
Solana’s NFT market performance
Despite the volatility in network usage and infrastructure that emerged at the close of the quarter, the first quarter smart contract platform welcomed new UFs. The NFT market reacted bullishly as sales volume reached one billion.
According to experts, the diversification of TLV among different DeFi applications of the network, such as Phantom mobile wallet and user experience enhancement, and the launch of different applications within the network, outside the DeFi domain, played a major role in Solana’s growth.
However, the network has also seen some rebounds as network failure has occurred once again. As we covered in the cryptokoin.com news, on May 2, the network was shut down for 8 hours and only network validators were able to go live after restarting a cluster. This is one of the few other cases traced back to severe network congestion.
Solana’s network performance is both promising and alarming
In the last quarter of this year, Solana saw an increase in certain metrics. Similarly, some downside movements have also surfaced. Messari’s report includes the following data: “While market value and revenue decreased by 30% and 43.5%, respectively, the network experienced sustained upward trends in usage. For example, average active unique payers (+28.4%), average transactions per second (+94.8) and total average daily transactions (+4.2%) increased.”
Additionally, the decrease in revenue generation reflects a decrease in average transaction fees of -44.8% as reported in the report. Revenue also fell due to declining network performance. This has been traced to a major drop during periods of network congestion. Messari explains:
The price-to-sell (P/S) ratio increased from 676x to 991x, trending bullish as revenue fell faster than market cap. Unlike last quarter, network usage continued to increase while financial performance declined.