More Trouble For Solana, Will The Ethereum-Killer Survive In 2023

A devastating decline

Solana’s price has tanked by almost 95 percent year-to-date (YTD). Although Solana was not the only network to withstand the bitter crypto winter, it certainly fared much worse than others, coming in third in terms of YTD losses.

Solana was one of the top-performing crypto assets at the beginning of this year, trading around the $139 mark in April. However, the coin started a rapid decline on the back of several network outages and the collapse of the Terra ecosystem.

Source: SOL/USD TradingView

The chart above shows a couple of times when Solana has suffered the most, beginning with the Terra (LUNA) meltdown in May. Moreover, in August, the network was the victim of a multimillion-dollar hack. Over 8,000 wallets were attacked, and users lost over $8 million, further damaging the ecosystem.

SOL dropped once again after FTX collapsed in November. In fact, SOL was one of the worst-hit tokens after the FTX implosion, falling from $36.9 before the FTX bankruptcy to $9.98 at the time of writing, after sustaining an additional 11.22 percent drop over the last 24 hours. 

Top NFT projects about to depart from Solana

Although Solana is the second largest NFT ecosystem globally, major projects and developers are thinking of abandoning it. For instance, on December 25, DeGods and y00ts, two of the biggest NFT collections on Solana, announced their imminent departure from the ecosystem. 

These projects are considering a move to Solana’s competitors. For instance, the DeGods NFT project announced on Twitter that it will be bridged to Ethereum in the first quarter of 2023, while y00ts announced its move to Polygon within a similar timeline. The migration of these major NFT projects could trigger further ecosystem departures, especially if Solana’s price valuation does not improve in the coming months. 

A decline in developer activity

With a couple of top NFT projects abandoning Solana, it is clear that developer activity has declined on the platform. According to data provided by Token Terminal, Solana has suffered a massive 90 percent dip in the number of developers on the network, which fell from 2,500 in January to a mere 75 over the past few months.

However, these figures were refuted by the team at Solana. They questioned the metrics based on which the study was concluded and even called it false. On the contrary, Solana mentioned on their Twitter page that there were thousands of developers working on multiple new programs daily on their network.

Total value locked (TVL) is also seeing a steady decline

Declining TVL is another worrying sign for Solana. According to DeFiLama, Solana’s TVL has dropped from around $68 million in June to $18.99 million at the time of writing. Several crypto experts have also taken a dig at the Ethereum killer amidst its recent price and TVL drops. 

“Before you make fun of that kid who still believes in Santa, just remember there are people who still believe in Solana,” said crypto analyst Mike Alfred in a December 26 tweet.

In conclusion

Contrary to the aforementioned data, the Solana team recently published a blog providing users with a few reasons to be excited for 2023. It detailed all the positives from the year and a roadmap for future growth. 

The network is also expected to onboard the Helium network in 2023, which could provide a much-needed shot in the arm for the faltering network. However, with Helium itself struggling with 95 percent losses YTD, not many are optimistic about the move. 

Suffice to say, it’s going to take a lot for Solana to register a comeback, but if it does, the network has all the trappings to revisit, and perhaps surpass, its glory days from November 2021.