Solana looks to reignite interest in its DeFi sector

CRYPTO_NEWS SOL

Solana [SOL] recently encountered difficulties in gaining a strong foothold in the fiercely competitive DeFi sector. To address this, the network implemented various strategies to attract a more extensive user base, particularly within the DeFi realm.

 

New incentives for users

 

One significant strategy involved the adoption of points programs by several Solana DeFi protocols, such as MarginFi, Cypher, Solend, and the latest entrant, Jito.

 

These programs were aimed at quantifying and rewarding user contributions to the protocols, incentivizing users to actively engage with Solana’s DeFi offerings.

 

More improvements needed

 

Another indicator of a potential positive future for Solana would be the improving TVL on the Solana network. According to Artemis’ data, Solana’s TVL surged from 296 million to 313.75 million over the last few weeks.

 

However, despite a recent surge in Total Value Locked (TVL) within the Solana ecosystem, there has been a noticeable decline in Decentralized Exchange (DEX) volumes.

 

These volumes play a pivotal role in the vitality of a DeFi network, and the decrease in DEX activity raised concerns about Solana’s DeFi landscape’s health and future prospects.

Data from Token Terminal further underlined these challenges, revealing a 14.5% reduction in fees and revenue generated by the Solana protocol. This decline underscored the need for additional development and strategies to enhance user engagement and adoption in Solana’s DeFi space.

 

Stablecoin volumes rise

 

Solana’s collaboration with Visa, however, injected a fresh wave of optimism into the ecosystem. This strategic partnership resulted in a considerable boost in USDC activity on Solana, leading to a substantial upswing in daily transfer volumes.

 

Furthermore, it spurred increased engagement from large investors, often referred to as whales. This collaboration positioned Solana to strengthen its position in the DeFi sector, offering efficient payment solutions and attracting a broader user base.

 

Despite these commendable efforts and collaborations, Solana’s native token, SOL, faced a decline in price over the past month. SOL was trading at $19.337 at the time of writing.

 

Nevertheless, the increased trading volume of SOL indicated sustained interest and activity within the network.

 

Source : AMBCrypto by Himalay Patel / September 27, 2023

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