Solana (SOL) Becomes the Second-Largest DeFi Network After an Extraordinary Performance in Q4 2024

A recent report by market intelligence firm Messari has highlighted an extraordinary performance by Solana (SOL) during the fourth quarter of 2024

Solana (CRYPTO: SOL) had an extraordinary fourth quarter of 2024, which a recent report by market intelligence firm Messari might characterize as the best quarter for any blockchain in history.

Solana Becomes Second-Largest DeFi Network

The report highlights a Chain Gross Domestic Product (GDP) growth of 213% quarter-over-quarter (QoQ), rising from $268 million in Q3 to $840 million in Q4.

Among the leading applications that drove this revenue were Pump.fun, which generated $235 million, and Photon, which saw explosive growth with $140 million in revenue.

The overall uptick in revenue can be attributed largely to speculation in memecoins and a surge in AI-related cryptocurrencies launched during this period.

Solana’s decentralized finance (DeFi) total value locked (TVL) grew by 64% QoQ, reaching $8.6 billion and positioning it as the second-largest DeFi network, surpassing Tron in November.

The DeFi TVL, when expressed in SOL, saw a 28% QoQ increase, totaling 46 million SOL. The average daily spot decentralized exchange (DEX) volume also skyrocketed by 150% QoQ to $3.3 billion, driven by a resurgence in memecoin trading and the rise of AI-themed tokens.

In terms of stablecoins, Solana’s market cap grew by 36% QoQ to reach $5.1 billion, making it the fifth-largest stablecoin market among competing networks. The dominance of USDC continued, with its market cap increasing by 53% to $3.9 billion, capturing a 75% market share.

Increased Activity And Speculation

The liquid staking rate, which measures the percentage of liquid-staked SOL, rose by 33% to 11.2%, indicating that a significant portion of the eligible SOL supply — 66% — is now staked. This growth is crucial for a thriving ecosystem built on yield-bearing SOL.

The NFT market also saw a modest increase, with average daily volume rising by 7% QoQ to $2.7 million. Tensor dominated this space, achieving $103 million in volume, while Magic Eden experienced a decrease of 28% to $68 million.

Network activity metrics reflected robust engagement, with average daily fee payers increasing by 171% QoQ to 5.1 million. The number of new fee payers surged even more dramatically, growing by 189% to 3.8 million. Average daily non-vote transactions rose by 32%, reaching 81.5 million.

Interestingly, the average transaction fee saw a notable uptick, increasing by 122% QoQ to $0.05, driven by heightened network activity fueled by speculation regarding a more favorable regulatory environment for cryptocurrencies in the U.S.

Despite these gains, staked SOL experienced a decrease of 5% in Q4, which could be attributed in part to the FTX estate unlocking its tokens. However, SOL’s market cap itself grew by 27% QoQ to $91 billion, peaking at $120 billion in November.

By the end of the quarter, SOL ranked sixth among all cryptocurrencies in market cap, trailing behind Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), Tether’s USDT, XRP and Binance Coin (CRYPTO: BNB).

Currently, SOL is trading at $199, down 22% over the last two weeks, amid growing macroeconomic challenges that are having a significant impact on risk assets.