DeFi has been making some serious waves lately, with TVL in $ going up in the recent months. However, if you take a deeper dive into the numbers, you’ll find that the TVL in SOL is actually waaaaay down from its ATH and hasn’t recovered from the FTX and SBF saga.
The 3 biggest cheerleaders ft. VCs who pumped SOL are also gone or unable to help due to their own issues. FTX + SBF are gone, and the capital, influence and support they had during the last bull run is also gone. Jump crypto (Chicago firm’s crypto arm) and MultiCoin Capital are also unable to pump more money into it like last time.
Compounding the issue is the bankruptcy estate selling/dumping of 71M SOL, which is 17% of circulating supply. A huge amount of tokens to dump into the market, no matter how you spin it.
On top of this, Solana’s economics are also not sustainable. The network generates barely any revenue (5 figures $ a day) which is not enough to maintain the network. This leads to token inflation to pay the network validators, resulting in the network having to rely on speculators to drive the price up and keep them afloat.
All of this paints a bleak picture for DeFi, and it remains to be seen if the industry can recover from these issues.