Solana saw two positive developments this week with the launch of the Saga Android-based smartphone powered by Solana blockchain and the retail trading debut of Grayscale’s Solana Trust shares.
The developments along with bullishness in the broader market, boosted the price of SOL by 29.05% from April 11 to a monthly high of $26.03.
While the mobile launch positively boosts the Solana ecosystem, the Saga phone appears overpriced at over $1,000 apiece. Nevertheless, the smartphone received positive reviews in user experience and quality.
Independent cryptocurrency investor, Amy Wu, noted that “Saga-exclusive dApps, games, and rewards as the phone ships globally, which will also make it easier to justify the $1,000 premium price.” It remains to be seen how the Solana Foundation leads the marketing efforts for the phone against existing giants like Samsung and Apple.
The Grayscale fund has only $2.9 million in assets under management (AUM) in the Solana Fund, which is considerably less compared to the 24-hour daily trading volume of SOL, which surpassed $500 million, to have an impact on price.
There are also warning signs of lack of growth across on-chain metrics and bullishness across the derivatives market, threatening a steep correction.
NFTs carry the Solana ecosystem
The number of daily transactions on Solana reached a new all-time high in April, showing a consistent uptrend. However, the daily active accounts have dipped to new lows, which raises some concerns.
Solana’s DeFi ecosystem subsided after FTX’s collapse, with significant liquidity drained. The total deposits on Solana DeFi applications are less than $300 million, with Solana knocked out of the top ten DeFi blockchains by liquidity value locked, per DeFiLlama.
DeFi usage across the Solana ecosystem has been limited to liquidity staking protocols, with decentralized exchanges and lending protocols taking a backseat. It appears that NFTs are carrying the ecosystem.
Solana’s market share in NFT trading rose from 6% to 14% of total NFT sales volume in less than a year by February 2023, according to a Delphi Digital report. It is the second-largest NFT ecosystem after Ethereum. The report added,
“The Solana NFT ecosystem is driven by traders who are more financially incentivized and trade a lot more often compared to Ethereum NFT users.” However, the NFT trading volumes have declined since February 2023 below the…
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