Source: Cointelegraph Original: "{title}"

The native token of Solana, SOL, fell by 9% from March 26 to April 2, but several key metrics increased during the same period. Despite the drop in SOL's price, the Solana network continues to outperform its competitors, maintaining its second position in deposits and trading volume. Traders are now wondering how long it will take for SOL's price to reflect this on-chain strength.

The decline in investor interest in SOL may be related to the unlocking of 1.79 million SOL on April 4, which are worth over $200 million. There is noticeable selling pressure, as these tokens were staked in April 2021 when SOL was trading close to $23. Another factor is the decreased interest in meme coins, which were a major driver of new user adoption on Solana. As speculative inflows diminish, the growth in activity may not immediately translate into price increases.

Several meme-themed cryptocurrencies, including WIF, PENGU, POPCAT, AI16Z, BOME, and ACT, have dropped by 20% or more in the past week. However, despite the deteriorating market conditions, the Solana network has outperformed some competitors. Its total value locked (TVL) has risen to its highest level since June 2022, while decentralized exchange (DEX) trading volume has shown significant resilience.

Total value locked (TVL) in Solana, priced in SOL. Source: DefiLlama

Deposits in Solana's decentralized applications (DApps) rose to 53.8 million SOL on April 2, a 14% increase from the previous month. In dollar terms, the total of $6.5 billion is $780 million more than its closest competitor, the BNB Chain. The top DApps on Solana ranked by TVL include Jito (liquid staking), Jupiter (leading DEX), and Kamino (lending and liquidity platform).

While it does not yet pose a direct threat to Ethereum's $50 billion TVL, Solana's on-chain data shows greater resilience than the BNB Chain, Tron, and Ethereum's Layer-2 networks (such as Base and Arbitrum). In terms of DEX trading volume, Solana holds a 24% market share, while BNB Chain has 12% and Base has 10%, according to DefiLlama.

Monthly market share of DEX trading volume. Source: DefiLlama

Although Ethereum has regained its lead in DEX trading volume, Solana has demonstrated strong resilience following the meme coin bubble burst. For context, Raydium's weekly trading volume fell 95% from its historical peak of $42.9 billion reached in mid-January. Nevertheless, Solana has proven that traders appreciate its focus on base layer scalability and integrated Web3 user experience, despite ongoing criticisms related to maximum extractable value (MEV).

Source: Cbb0fe

In short, MEV occurs when validators reorder transactions for profit. This practice is not unique to Solana, but some market participants—such as user Cbb0fe, who identifies as a DeFi liquidity provider—have raised concerns about internal control issues. While not explicitly stated, the criticism may refer to incentives provided by Solana Labs to offset the high investment and maintenance costs required by certain validators.

Proponents of changing Solana's token issuance argue that the rewards obtained through MEV have already provided sufficient incentives for validators to secure the network, eliminating the need for further inflationary pressure on SOL. Meanwhile, Loring Harkness, a core contributor to Shutter Network, advocates for encrypting transactions before they enter the memory pool to prevent validators from manipulating their order.

The growth in Solana's TVL and the resilience of its DEX market share may not be enough for SOL to retest the $200 level seen in mid-February. However, it has firmly established its position as the second leading platform for decentralized applications, behind Ethereum, thanks to consistent activity, infrastructure development, and growing interest from developers and users.

This article is for general informational purposes only and does not constitute legal or investment advice, nor should it be construed as legal or investment advice. The views, thoughts, and opinions expressed in the article are solely those of the author and do not necessarily reflect or represent the views and positions of Cointelegraph.

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