Solana TVL and price drop 50%+ from ATH, but gaming DApps could turn the tables

2022 has not been a bully commencement for cryptocurrencies and to date, the full marketplace capitalization has dropped by 21% to $1.77 trillion. Solana's (SOL) correction has been adjacent much brutal, presenting a 48.5% correction year-to-date.

Solana (blue) vs. Ether (orange), AVAX (purple), BNB (yellow). Source: TradingView

Solana leads the staking charts with $35 billion successful worth locked, which is equivalent to 74% of the SOL tokens successful circulation. Multiple reasons tin beryllium identified for the underperformance, including four web outages successful precocious 2021 and aboriginal 2022.

The latest incidental connected Jan. 7 was attributed to a distributed denial-of-service (DDoS) attack, causing Solana Lab developers to update the codification and consequently cull these types of requests.

However, investors are much acrophobic astir the centralization caused by the costs of being a Solana validator. To execute 400 millisecond artifact times, the recommended hardware includes a 12 halfway 2.8GHz CPU, 256 GB memory, high-speed 1 TB SSD drives and a low-latency net connection.

solana is chill for a centralized firm state-sync machine... I conscionable similar existent crypto and blockchain

dApp usage is connected the decline

Solana's superior decentralized exertion metric started to show weakness earlier successful November aft the network's full worth locked (TVL) began to linger astatine $15 billion.

Solana web Total Value Locked, USD. Source: DefiLlama

The illustration supra shows however Solana's decentralized exertion (DApp) deposits saw a 50% alteration successful 3 months arsenic the indicator reached its lowest level since Sept. 8. As a comparison, Fantom's TVL presently stands astatine $9.5 cardinal aft doubling successful 3 months. Another DApp scaling solution competitor, Terra (LUNA), saw an 87% TVL hike to $23.2 billion.

On the agleam side, connected Feb. 21, FTX.US, the American limb of the planetary crypto derivative and spot speech FTX, announced a new blockchain gaming unit. It is besides worthy noting that Solana Ventures partnered with FTX and Lightspeed Venture connected Nov. 5 to motorboat a $100 cardinal money dedicated to the sector.

To corroborate whether this driblet successful TVL should beryllium concerning, 1 should analyse DApp usage metrics. Some DApps are not financially intensive, truthful the worth deposited is irrelevant.

Solana dApps 30-day on-chain data. Source: DappRadar

As shown by DappRadar data, connected Jan. 28 the fig of Solana web addresses interacting with decentralized applications dropped by 18% connected average. The lone affirmative alteration was Solend, an algorithmic lending protocol.

The decreased involvement successful Solana DApps was besides reflected successful its futures unfastened interest, which peaked astatine $2 cardinal connected Nov. 6 and was precocious deed with a steep correction.

The gaming assemblage could beryllium a astonishment factor

Even though Solana has been deed the hardest compared to akin astute declaration platforms, determination is coagulated web usage connected non-fungible tokens (NFT) marketplaces, arsenic measured by Magic Eden's 178,820 progressive addresses successful the past 30 days.

Moreover, Solana Ventures' stake connected the gaming assemblage could further showcase the network’s processing capacity. For instance, games correspond fractional of the apical 10 DApps crossed each blockchain covered by DappRadar. That includes Splinterlands, which has 578,280 progressive addresses and Alien Worlds which has 544,900.

The supra information suggests that Solana is losing crushed versus competing chains, but holders are not acrophobic due to the fact that 74% of the coins are inactive locked successful staking. As agelong arsenic Solana Labs' partnerships and investments proceed to amusement potential, determination is small crushed to beryllium bearish connected SOL.

The views and opinions expressed present are solely those of the author and bash not needfully bespeak the views of Cointelegraph. Every concern and trading determination involves risk. You should behaviour your ain probe erstwhile making a decision.