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Solana's Shifting Landscape: From DeFi to Consumer Applications
Key Insights
- Solana's strength lies in offering market-low transaction costs and quick confirmation times. These strengths make it well-suited for consumer products that involve lower-value transactions, rather than financial applications.
- Despite the decline in on-chain liquidity, Solana's developer ecosystem has shown resilience by actively building new functionalities, particularly in the consumer sector, including programmable NFTs and compressed NFTs.
- Solana's TVL across the network has depreciated by 20x since the beginning of January 2022, placing it well below competing chains.
- There has been a notable shift in user activity away from DeFi applications towards consumer protocols, such as NFT lending, social media, and GambleFi applications.
- The Solana landscape and user preferences continue to evolve, as seen in the transition of gateway interactions from DEXs to gaming applications and NFT markets, and the rise of emerging consumer applications.
- While Solana has successfully attracted new users, it still needs to overcome challenges in retaining them over the long term. Solana needs more compelling and distinctive applications to sustain user engagement and drive ecosystem growth.
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Ally is a Research Analyst on the Enterprise team at Messari. Prior to joining the team, Ally worked as a Structural Engineer at Magnusson Klemencic Associates. Ally graduated from the University of Illinois in 2018 with a master’s degree in Civil and Structural Engineering.
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