👋🏽 Hello everyone, gm gm, WELCOME BACK to another edition of the Overpriced JPEGs newsletter!
Today, we’re talking about Solana - thanks to our partners at Web3 Academy, who have joined up with us to write + curate in-depth, quality content directly in your inbox!
There’s been a lot of hype around Solana lately. If your X feed is anything like ours, its been filled with things like “Solana is taking over Avalanche in TVL”, or “Solana NFTs are booming”…
Remember: whenever this wave of hype comes your way, take a deep breath, relax and zoom out.
The worst thing you can do during these times is let yourself get carried away in the hype cycle.
Instead, today, we’ll break down the different things that are causing all of this hype on Solana, including:
Asset inflows are skyrocketing 🚀
SOL users receiving massive airdrops 🎈
NFTs on Solana gaining traction 📈
Memecoins on Solana showing strong performance 🤡
Stay tuned until the end of this newsletter, as we’ll share a few charts that should put the current state of Solana in a bit of perspective for you.
Let’s go. ⏬
Solana’s TVL Breaks Yearly Highs 🚀
You might’ve seen this chart go viral on X. Solana (blue) surpassed Avalanche (green) in total value locked onchain for the first time since November 2021.
You might’ve also seen that Solana reached $700 million in total value locked – levels not seen since the end of 2022.
All bullish signs, but here’s the deal. The TVL metric acts as a vote of confidence from users, demonstrating their trust in a protocol by their willingness to lock up funds in it.
But other than that, it’s a pretty useless metric. It’s the old way of measuring the success of a blockchain.
We’ve also said this when Solana’s TVL dropped from 10 billion dollars to 200 million. This didn’t say anything about the health of the Solana blockchain, as highlighted in a report from the beginning of this year.
So getting this hyped up because the TVL increased doesn’t make much sense.
Instead, we should focus more on metrics like active users, daily transactions, monthly tokens minted, smart contract interactions, developers, number of nodes, and so on…
That’s what actually brings value & revenue to a blockchain.
Regardless, let’s see why TVL increased drastically over the past few months.
Multi-million Dollar Airdrops 🤑
A month ago, Web3 Academy published a newsletter in which they highlighted a bunch of upcoming airdrops on Solana. $PYTH and $JUP were 2 of these airdrops.
Pyth (the Chainlink of Solana) airdropped 250 million $PYTH. At the time of this writing, 150 million tokens have been claimed (61% of the airdrop), by 46k wallets.
$PYTH is worth $0.40 right now, which means that $100 million has been injected into the Solana ecosystem through this airdrop alone.
As for Jupiter (a decentralized exchange on Solana), they plan to give away a whopping 40% of their token supply (40 billion $JUP) to almost 1 million Solana wallets. 😲
Expecting this to also be a big airdrop, adding even more money into the ecosystem.
Furthermore, Jito, a $SOL staking service (like Lido but for Solana) announced their own airdrop too.
They will drop 100 million $JTO tokens to those who have used their platform to stake $SOL.
Lastly, Portalcoin also announced $PORTAL.
To be eligible for this airdrop (you still have time), you need to post and tag them on X.
There are literally millions of $PORTAL tweets being sent. 😳
Right now, everyone’s FOMOing to Solana to farm these airdrops, which have been going on for months.
But the hype isn’t just around airdrops. NFTs & memecoins are going nuts too.
NFT & Memecoin Craze 🤯
The NFT market cap on Solana has gone from 5.2 million to 9.1 million $SOL in the past 30 days. Keep in mind that the price of $SOL has also surged from $36 to $60 so the increase is even bigger in USD terms.
Here are the top 10 NFT collections on Solana; some are up 100s, to 1000s of dollars in the past day only.
Similar to NFTs, Solana memecoins are going nuts, with $BONK leading the way. It is up 650% in the past 30 days. 🤯
All of this hype around NFTs, memecoins and airdrops are attracting new funds to the Solana ecosystem, hence why the TVL is on a tear. 📈
Millions Bridged to Solana 🌉
The primary driver for the crazy surges inside the Solana ecosystem comes back to 1 thing: inflows.
The Mayan bridge (the most popular way to bridge to Solana) has experienced a big volume of inflows over the last 10 weeks to Solana from Ethereum, Arbitrum, Avalanche and Binance Smart Chain.
Over $16 million have been bridged over from Ethereum to Solana in November.
Furthermore, Phantom recently announced their own in-app bridge, which makes it super easy for anyone to bridge assets over.
In its first 9 days, the Phantom Cross-Chain Swapper bridged over $1 million to Solana.
Wrapping Up 🧵 Zooming Out
With $SOL being up 6x this year, you might feel left out. Don’t worry, you’re not.
First of all, the craziness within the Solana ecosystem is just getting started. We’ve had a couple airdrops, a few NFT collections pump and one memecoin going to the moon.
That’s nothing compared to when we’ll enter the mania phase of the bull market. Here’s some perspective for you.
Despite the hype around TVL on Solana, this is still down massively from the high of $10 billion.
Imagine what will happen when we reach those levels again.
Additionally, the price of $SOL is still down 75% from the all time high of $250.
Imagine what will happen when $SOL gets back to those highs and beyond.
If you think that the hype during these past few weeks was overwhelming, you’re not ready for what’s about to happen over the next couple of years, as the bull market intensifies.
We’re here to guide you & ensure that you’ll make the most of what’s ahead.
Thanks for reading! ❤
Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.