Even after SOL's 20% drop, Solana NFT marketplace integration and DApp metrics still shine

Solana (SOL) price reached $143.50 on April 2 after an astounding 82% increase in 20 days. This positive performance can be attributed to recent NFT market-related news and a market-wide rally, but the current 22.7% decline may confuse investors.

The rally began after Coinbase Wallet added support for SOL and other Solana-based blockchain tokens on March 18. Cryptocurrency exchange Coinbase also outlined plans for “further integration” with Solana, linking Coinbase Wallet with decentralized applications (DApps) and NFTs hosted on the network.

Investors were also excited by the prospect of OpenSea integrating the Solana network. This means Solana will join Ethereum, Polygon, and Klaytn as payment options, visible in the “All Chains” drop-down menu on OpenSea’s “Ranking” page.

Solana’s strategy of focusing on the NFT market appears to be paying off, as on April 6, the layer 1 blockchain network rose to third place all-time in total NFT sales. Additionally, the most recent 30-day cumulative data shows Solana amassed $216 million worth of NFT sales.

Solana's DApp deposits are falling

Solana’s main decentralized application (DApp) metric started to show weakness after the network’s total value locked (TVL) dropped below 50 million SOL in late March.

The graph above shows how Solana’s DApp deposits fell by 30% in three weeks, with the metric hitting its lowest level since September 20, 2021. In comparison, Terra's TVL is up 34% year-to-date, while Fantom network deposits are up 30%.

Happily, on April 5, Neon released an alpha version of Solana’s Ethereum Virtual Machine (EVM), the first cross-compatibility and scaling solution. On April 7th, Solana announced that over 1.6 million network addresses currently own NFTs.

One DeFi App Stands Out

To confirm whether the drop in TVL is cause for concern, we should analyze the usage metrics of DApps.

Data from DappRadar on April 8 shows that the number of Solana network addresses interacting with decentralized applications has increased by an average of 11%. Orca, a user-friendly decentralized exchange (DEX), definitely shines with 153,290 users.

While Solana’s TVL has been hit hardest compared to similar smart contract platforms, network usage in the DeFi and NFT markets remains solid, according to Magic Eden’s 212,230 active addresses over the past 30 days.

The data above suggests that Solana investors shouldn't worry about the recent correction. The Solana ecosystem is driven by the important milestone of achieving Ethereum compatibility and NFT marketplace integration, and as long as this happens, the potential for further price appreciation seems possible.