Solana ETF bump fizzles after $161 price spike: A deeper dive for builders

1/ Key takeaways

Solana experienced a mixed June. While the anticipated REX-Osprey SOL Staking ETF briefly pushed prices to $161, it quickly retracted, settling around $152. The network saw declines in Real Economic Value, DEX volume, and Token Holder Net Income. However, it also set a new record for successful transactions (over 2.1 billion) and significantly increased app revenue, driven by trading-focused applications like Pump and Axiom. The launch of tokenized US equities (xStocks) also marked a notable expansion in use cases. Despite some compression in validator income, Solana’s apps are generating impressive revenue relative to the network’s economic value.

2/ Solana’s June performance: A closer look

Solana wrapped up June at $155, a slight 1.2% decrease month-over-month, which, while minor, indicates an underperformance compared to Bitcoin and HYPE for the second consecutive month. The much-anticipated REX-Osprey SOL Staking ETF went live as scheduled. This news initially caused SOL’s price to jump to $161, but it quickly receded, falling to around $146 within a day, and currently hovers near $152.

From an economic standpoint, Real Economic Value (REV) dropped by 48% in June, DEX volume saw a 35% decrease, and Token Holder Net Income plunged by 56% month-over-month, according to Blockworks Research. Despite these figures, Solana still maintains a leading position across all networks in these specific metrics.

On a more positive note, Solana achieved a new milestone in June by processing over 2.1 billion successful transactions. Application revenue climbed to $150 million, an increase from $133 million in May, accounting for a significant 35% of all application revenue across various blockchains. The top-earning applications, Pump and Axiom, collectively generated over $76 million in June, largely fueled by memecoins and leverage.

A notable shift in the DEX landscape saw Pump surpass Raydium for the first time in volume, securing a 32% share by the end of June compared to Raydium’s 26%. Trading-focused applications now constitute nearly 90% of Solana’s total application revenue. Additionally, xStocks – which offers tokenized US equities – launched on June 30 with 11 listings and 40 more planned, achieving over $1.3 million in day-one volume.

However, validator income is facing rapid compression, with Jito tips decreasing to 51% of total REV, and the validator set experiencing a 25% reduction due partly to Solana Foundation offboarding. Despite these challenges for operators, Solana applications generated an impressive $2.40 in revenue for every $1 in REV in June, an all-time high. With the pump.fun ICO confirmed, this trend of accelerating app revenue generation is likely to continue.

3/ Hola Tech’s pov:

The recent fluctuations in Solana’s market, despite some declining metrics, highlight the dynamic and evolving nature of the blockchain space.

We see Solana’s record-breaking transaction volume and burgeoning app revenue as strong indicators of its underlying technical robustness and growing utility. This reinforces our confidence in Solana as a powerful platform for building scalable and efficient decentralized applications. The success of trading-focused apps and the introduction of tokenized equities like xStocks showcase the diverse opportunities within the ecosystem.

For founders and businesses looking to leverage Solana, our suggestion is to focus on building quality-driven, innovative solutions that address real-world needs, much like the successful applications on the platform. While market sentiment can be volatile, a strong foundation in secure and efficient development processes, coupled with a deep understanding of tokenomics and strategic partnerships, will empower sustained growth. The current environment, where applications are generating significant revenue, presents fertile ground for well-executed projects.

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