- The TVL held on Solana has decreased by more than 60%.
- User activity on the network also dropped.
- SOL has offered users no respite as it has since fallen 62%.
Severely affected by the sudden collapse of cryptocurrency exchange FTX, the total value locked (TVL) held on decentralized finance (DeFi) protocols hosted in the Solana [SOL] network has since shrunk by 67%, data from DéfiLlama revealed.
According to DeFi aggregator TVL, on Nov. 6, when Binance Founder and CEO Changpeng Zhao first tweeted his exchange’s decision to liquidate all remaining FTT holdings on its books, Solana’s TVL went off the rails. amounted to $1 billion.
Eleven days later, Solana’s TVL fell over 65% to be pegged at $335 million, at the time of writing.
Solend, Solana’s native lending and borrowing protocol saw the biggest drop, with its TVL dropping from $307 million on Nov. 6 to $32.04 million at press time.
Leading SOL staking platform Marinade Finance saw a 67% drop in TVL over the same period. With a TVL of $95 million, Marinade Finance remained the protocol with the highest TVL on Solana to date.
The reason for TVL’s drop on the Solana channel was due to a sharp drop in the number of active users on these protocols due to fears that the network could collapse due to its close ties to the disgraced Samuel Bankman- Fried.
However, user inactivity was not immediate. String data of Dune analysis revealed an increase in DeFi daily active users on Solana between November 7 and November 9.
This was so when users rallied to remove their assets, consisting of a large volume of stablecoins and Solana-based tokens from multiple protocols on Solana.
After that, DeFi daily active users on the chain started to drop. Between Nov. 9 and press time, that’s down more than 60%, according to data from Dune Analytics.
Down goes the carousel
In addition to TVL’s decline on Solana, data from Dune Analytics revealed an overall decline in daily active users (DAUs) across the network during the reporting period. With 113,566 daily active users as of November 16, the number of DAUs on Solana has dropped 25% since CZ’s first tweet on November 6.
Among the major NFT marketplaces hosted on Solana, DigitalEyes saw the biggest drop in user activity since Nov. 6. According to data from Dune Analytics, its DAU count dropped by 80% during the reporting period.
Over the same period, leading marketplace Magic Eden suffered a 33% drop in daily user activity.
Still reeling from the general market decline, the price of SOL has fallen 62% since the start of FTX issuance, according to data from CoinMarketCap show.