Solana: Encouraging performance of the Layer 1 Blockchain with massive increase in Transactions Processed Per Second (TPS) in Q3 of 2022

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NFT Solana Spaces at Hudson Yards, New York
Preface by Silke Brand | If we look back at the Q3 we have some good news: the number of transactions processed per second (TPS) increased in Q3 2022 by over 40.4% from Q2’s 2,310 TPS. When we look at the Solana price on 29th October 2022 it is 32,86 USD with a 24-hour trading volume of 1.25 Billion USD. So this is a bit down compared with the 30th June 2022 when it was at 33,91 USD with a 24-hour trading volume of 1,32 Billion USD. The current CoinMarketCap ranking is #10 (#9 at the end of June 2022), with a market cap of 11.8 Billion USD (13.5 Billion USD at the end of June 2022).

However Christian Encila from NewsBTC is optimistic about the upcoming future of Solana as he outlines below by referring back to the Messari’s performance evaluation for Q3 of 2022.

The crypto bear market that began in May has hurt Solana just as much as the rest of the market. CoinGecko reported a massive 16.4 percent decrease, and the price of SOL is now at $32.27 at the time of writing (early of 29th October 2022).

Messari’s most recent quarter on quarter performance evaluation of the Solana network provided illumination into the L1’s inner workings, thus it’s possible that this is the case.

Despite a generally pessimistic market, the study highlighted very encouraging performance for the token in the third quarter. However, Q3 was a rough quarter for Solana, like it was for most cryptocurrencies, and this could have an impact on the data Messari reported.

In general, Solana’s tenacity is demonstrated by the fact that it is still expanding its network and implementing its growth strategy.

Solana Network Activity Up

Messari reports that there was an increase in network activity at SOL. The daily average number of transactions that do not involve a vote increased by nearly 70 percent from 20.544 million in the second quarter.

Chart: Messari

In addition, the number of transactions processed per second (TPS) increased by over 40.4% from Q2’s 2,310 TPS.

It’s important to note, though, that transaction fees have been going down. For Solana, transaction fees have been falling steadily since the end of 2021, the research claims.

From $0.0005 to $0.0003, this represents a 41.9% drop, making Solana more appealing to developers who seek to build dApps on a low-fee L1 chain with rapid performance.

However, when network fees drop, revenue declines as well. Solana continues to endure a gradual reduction in quarterly revenue since Q4 2021.

Chart: Messari

Sustaining Long-Term Stability

Solana concluded the second quarter with quarterly sales of $6.45 million, whereas the network ended the third quarter with a meager quarterly revenue of $4.832 million.

Solana also saw expansion in the network’s NFT sector. In the third quarter, there was a 19.3% increase in the number of newly issued NFTs. However, this is counterbalanced by a reduction in both NFT buyers and sellers.

On the basis of the quantitative and qualitative information supplied by Messari, Solana’s future remains bright. Messari underlined the emergence of the core user base that will sustain SOL’s long-term stability in light of earlier network issues.

DeFi in Solana continues to thrive despite a reduction in staking yield and a continuing decline in TVL data. Despite the recent increase in SOL’s price, investors should remain cautious, as deteriorating metrics may affect the network’s future performance.

SOL market cap at $11.8 billion on the weekend chart | Featured image from Selvan B - Unsplash, Chart:

Disclaimer: The analysis represents the author's personal knowledge and should not be construed as investment advice.

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