From Solana bouncing back to $150 to Pump.fun generating $85M in revenue, here is a 4-minute breakdown of everything important that happened in Solana this week.
TL;DR
- Market Crash: Crypto markets, including Solana, experienced a severe crash dubbed "Black Monday." SOL's price dropped to $110 but rebounded to $150 within days.
- DeFi Resilience: Despite the market downturn, Solana's DeFi projects showed strength. They set new records with $4B in DEX volume and $1.78B in Perps volume shortly after the crash.
- Memecoin Mayhem: While DeFi held strong, memecoins on Solana took a significant hit. Popular tokens like WIF, PopCat, Billy, and MuMu lost 50-60% of their value.
- Jump Crypto Concerns: Jump Crypto's liquidation of over $500M in ETH raised fears about the future of Firedancer, a crucial Solana validator client they're developing. However, GitHub activity suggests development is ongoing.
- Pump.fun Controversy: The token deployment platform reached 1.5 million launches in 42 days, generating $85 million in revenue. It now accounts for 40.97% of all Solana DEX transactions, despite criticism from the crypto industry.
- Ecosystem Funding: Messari reported that 47 Solana ecosystem projects raised a combined $113 million in Q2.
- Future Events: Excitement is building for Solana Breakpoint 2024, set to take place in Singapore alongside other major tech events.
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What Happened in July on Solana?
Before we dive into the first week of August, let’s quickly cover Solana’s highlights last month.
- Libre Capital partnered with Hamilton Lane to expand institutional finance on Solana and offer global access to alternative assets with lower investment minimums.
- Solana Blinks (blockchain links) pick up speed with over 250 created in a month, allowing developers to integrate Solana functionality across various platforms.
- Claynosaurz NFT collection won 13 Collision animation awards against major studios like Disney and Sony.
- Solana staking reaches new heights, surpassing $4 billion in July
- Memecoin mania hit an ATH with pump.fun scooping $2.3m in daily fees and Raydium crossing $6b weekly volume
- Helius became Solana's top validator after introducing their liquid staking token.
- Solana reports claimed a higher total economic value (transaction fees plus MEV tips) than Ethereum and Layer 2 solutions in July.
- Firedancer, the new validator client, accepted its first block on testnet, aiming to increase transaction speed and network resilience.
- Messari reports 47 Solana ecosystem projects raised a combined $113 million in Q2
- Nearly $585 million in assets were reportedly bridged to the Solana network, potentially indicating growing adoption.
- Solana Breakpoint 2024 fever is starting to build. It takes place in Singapore this year, wedged in between Token2049 and Singapore F1.
This Week’s 5 Biggest Solana Stories
- Solana Crashes With TradFi and Crypto Markets, Rebounds Swiftly
The crypto market experienced a brutal crash on “Black Monday” that brought back Covid 2020 and FTX 2022 fears, wiping out $1.2 billion in value and liquidating over 316,000 traders.
The crash was triggered by a range of factors.
Solana’s price dropped to $110 at one stage until rebounding to $150 days later.
While TradFi platforms like Robinhood, Vanguard and Fidelity all experienced shutdowns during the peak crash, it’s encouraging that Solana’s DeFi protocols continued to largely function as usual, processing large liquidations without any hiccups.
The market outlook remains uncertain, with analysts divided on whether this is a temporary setback or a sign of an impending recession. Investors are bracing for continued volatility in the coming months.
2. Solana DeFi Survives and Thrives While Memecoins Sink
Solana's DeFi landscape has been on a tear in 2024, holding strong even as the broader market took a hit. While SOL felt the pinch, many DeFi projects managed to weather the storm, some even outpacing the network's native token.
The gaming sector wasn't far behind, proving its mettle with several of the stronger GameFi tokens, most admittedly at a fraction of their crazy 2021 prices, standing tall against the downturn.
According to news site SolanaFloor, Solana DeFi broke two records within 48 hours in the aftermath of “Black Monday”’s chaos: clocking $4B in DEX volume (40% by Orca) and $1.78B in Perps volume (mainly Jupiter).
On the flip side, meme coins lived up to their volatile reputation. Some took a nosedive, with WIF, PopCat, Billy and MuMu shedding 50 to 60% of their value and leaving holders in a world of pain. Even the big-name meme tokens couldn't dodge the bullet, though a few managed to keep their heads above water. All in all, Solana's DeFi and gaming sectors showed they've got some staying power, while the meme coin crowd reminded us why they're not for the faint of heart.
3. Jump Crypto’s $500m ETH Liquidations Sparks Firedancer Fears
Jump Crypto, facing legal issues, has liquidated over $500M worth of ETH since July 24th, causing market turmoil. The liquidation coincided with Ethereum ETF excitement and resulted in over $1B wiped from crypto markets in 24 hours. Jump Crypto's CEO recently resigned amid a CFTC probe, possibly related to the 2022 Terra Luna collapse.
Jump opened its crypto division in 2021 and provided much-needed capital to projects struggling in the aftermath of 2022’s bear market and FTX meltdown. It’s also served as a pivotal market maker and has backed a number of big names like Luna, oracle network Pyth, Wormhole and Firedancer.
Importantly, the firm's actions have raised red flags about the viability of Solana's vital Firedancer validator client, which Jump Crypto has been developing as a Solana consensus node implementation that will improve the network and help rid it from those troubling outages once and for all.
Despite fears about Firedancer's future, recent GitHub activity suggests development continues. The Solana community remains cautiously optimistic on social media, noting that Firedancer's open-source nature allows for potential continuation by other developers.
It would be a massive blow for Solana if Firedancer were to be abandoned, after the project generated massive hype last year following its Breakpoint 2023 announcement.
4. Ethena (ETH) And USDe Now on Solana, SOL as Collateral?
On 7 August, Ethena Labs launched its USDe stablecoin on Solana, potentially backing it with SOL. USDe is marketed as crypto's first fully backed, on-chain, scalable, and censorship-resistant stablecoin.
Ethena claims that 90% of Solana’s $3.5 billion stablecoin market (of which USDC makes up 68%) does not allow users to accrue rewards. ENA’s new deployment allows Solana users to transact in USDe, as well as accrue Ethena's native rewards with sUSDe.
Ethena has proposed adding SOL as a backing asset, which could open up $2-3 billion in additional open interest, and this is supported by SOL's strong funding performance in 2024.
Despite skepticism due to comparisons with the failed Luna stablecoin, USDe has been widely adopted by Solana's DeFi ecosystem, including Drift, Kamino Finance, and Orca. The integration offers new opportunities for users to leverage their holdings and earn yields within the Solana ecosystem.
5. Pump.fun Rakes in Memecoin Millions Despite Industry Vitriol
Pump.fun, a Solana-based token deployment platform, has reached 1.5 million token launches in just 42 days after hitting the 1 million mark. Since its January launch, the platform has generated over $85 million in revenue. It now accounts for 40.97% of all Solana DEX transactions, though only 4% of DEX volume.
Co-founder Alon acknowledges criticism that pump.fun is "the worst thing to happen for crypto," but argues it exposes "crypto for what it really is." Despite concerns that it delegitimizes the industry, taking the focus off “real” projects, and criticism over its rampant scam projects and high failure rate, pump.fun continues to grow rapidly, with plans to improve user experience while maintaining its culture.
What You Can Do Now
If you're interested in Solana, now might be a good time to look into DeFi projects on the platform. They've shown strength even during market downturns.
Consider exploring established projects like Orca or Jupiter, which have been handling high trading volumes.
Keep an eye on the progress of Firedancer, the new validator client that could make Solana faster and more stable. However, be cautious with memecoins and new token launches on platforms like pump.fun, as they can be very risky. Always DYOR.
Lastly, if you're planning ahead, think about attending Solana Breakpoint 2024 in Singapore for networking and learning opportunities.
That’s all for SOL this week!
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