Over $600m flushed out: Is Solana DeFi headed out of the window

The case of Solana has increasingly become interesting in the past few days. According to data from DefiLlama, the total value locked in Solana’s DeFi has dropped by around $600 million since 31 July.

Solana’s DeFi TVL started the month at $2.15 billion but was down to $1.56 billion at press time. This has gone on to reflect Solana’s position among the TVL in chains.

At the start of the month, Solana was ranked fifth but is down a further two places with Polygon and Acala surpassing it. In the past day alone, Solana has lost over 16.53% of its total value locked in DeFi protocols.

Source: DefiLlama

What happens now?

Despite the recent blemishes, Solana has seen a general upturn in select tokens being traded on the network. CoinGecko has reported on the most traded tokens on Solana in the past 24 hours.

STEPN’s GMT token tops the chart with over $356.8 million traded, followed by the SRM token at $72.5 million.

Everlend protocol has also posted an update on the Solana lending in the second week of August. The total Solana lending TVL during this period has accumulated at $769.5 million.

The list of the lending protocols is headed by Solend at $329.49 million as it continues to dominate the proceedings. Mango and Tulip protocols continue to occupy the second and third positions at $231.77 million and $81.5 million respectively.

Among the token performances, Tulip is the only one to show any positive change over the week with a 3.76% surge.

This further reflects the onslaught on Solana DeFi as it continues to dive in August.

How did SOL react to it?

The SOL token has been feeling the market duress of late with “sell” class becoming far more common around. This has led to a near 2% dip in the past day which has brought SOL’s prices down to $43.

The falling prices are also exacerbated by the drop in network volume which is down by around 2.20%.

Well, Solana is also going through a rough patch as far as social activity is concerned.

Recent major upticks in Shiba Inu and Ethereum have led to diminishing social volume for Solana as seen in the chart below. While managing some rare surges, the social volume metric has underperformed and was valued at 36 at press time.

Source: Santiment

The worst might yet come for Solana in the next month when Ethereum’s PoS transition takes place.

The Merge is a highly anticipated event that is expected to be a major bullish signal for Ethereum’s PoS chain. While not definitive yet, the change could end up affecting other chains around with Solana a viable target.