• Solana [SOL] has faced significant scrutiny due to issues with downtimes on its network.
• Messari analysts suggest that if Solana turns on network incentives, its TVL could be on par with other L2 chains.
• The overall volume of AMM’s (Automated Market Makers) has increased, showing a favorable development for Solana within the realm of DeFi.
Solana’s Downtime Woes
As per recent data, Solana’s downtime woes may not be as bad as they seem. Daily active users and fees continued to decline as SOL suffered. In the past 12 months, Solana [SOL] has faced significant scrutiny from the cryptocurrency community, largely due to issues with downtimes on its network.
Improving Technology
However, if recent data is to be believed, some of the negative attention may not be entirely warranted. According to Messari, Solana has improved its technology and updated its network every time it has faced downtime issues. The same grace afforded to systems like AWS and chains like ETH during times of high traffic should be afforded to Solana.
Declining TVL
Many remain skeptical about Solana’s DeFi growth, citing its declining TVL as an indicator of the network’s declining health. However, it was important to note that a lot of the activity on the Solana network has been because of derivatives, NFTs, and de-pin networks, which do not contribute to Solana’s TVL. At press time, the TVL of Solana was $277.37 million, after falling by 2.43% in the last 24 hours.
Increased AMM Activity
The overall volume of Automated Market Makers (AMMs) have increased despiteSolanas’s declining TVL – showing a favorable development for Solana within DeFi space.. Source: Solscan
Network Incentives
Solana developers have also been working on other updates to improve the state of their DeFi ecosystem such as turning on network incentives so that it could quickly reach parity with top L2s in terms of total value locked (TVL).