Benzinga - Solana‘s (CRYPTO: SOL) native token sees a notable decline after a recent rally, raising questions about the supporting factors behind its temporary surge.
According to a Cointelegraph report, Solana’s SOL has undergone a 10% correction, falling to $40 on Nov. 6 after failing to breach the $44.50 mark. This descent follows a substantial 36.6% rise between Oct. 30 and Nov. 2, challenging the validity of its $16.9 billion market capitalization.
The peak price on Nov. 2 was the highest since August 2022, coinciding with the Solana Breakpoint 2023 conference in Amsterdam.
The conference also saw the unveiling of Firedancer, a new client designed to boost speed and reduce hardware requirements for validators. Moreover, Solana’s network data was made available on Google Cloud BigQuery on Oct. 31, offering developers and companies valuable data insights.
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Despite these developments, challenges remain for Solana. On Oct. 17, Lido Finance announced its withdrawal from the Solana network, pointing to financial unsustainability.
The article also highlights the discrepancy between on-chain activity and the recent price jump. Solana’s DApp deposits saw a 30% drop in 30 days, and its total value locked (TVL) hit a two-year low on Nov. 5.
When contrasted with other networks, Solana’s DApp volume and active user base appear lackluster. For instance, Raydium, Solana’s largest DEX, reported just 17,380 active addresses, while BNB Chain’s PancakeSwap had over 500,000 in the same timeframe.
Further, issues of possible centralization have surfaced, as a significant majority of validators received delegations from the Solana Foundation or Alameda. These revelations bring into question the network’s decentralization and overall ecosystem health compared to its competitors.
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