Key Takeaways:
- Optimism and Arbitrum flipped Solana in terms of TVL.
- The Network's TVL has been in trouble for a year, since peaking in Nov 2021.
- SOL ha slim chances of fast recovery.
YEREVAN (CoinChapter.com) – Ethereum layer-2 scaling solutions Arbitrum and Optimism surpassed Solana by their total value locked (TVL).
Optimism and Arbitrum flip Solana
As of Nov 2, Solana TVL stood at $941 million, a 90.5% drawdown year-to-date, according to the crypto tracking platform DeFiLlama. In comparison, Arbitrum and Optimism’s TVL touched $1.05 billion and $962.2 million, respectively.
Interestingly, Arbitrum leapfrogged Solana in the number of projects deployed on the platform: 132 to Solana’s 88. A cryptocurrency-related subreddit noted the changing balance and commented that nine of the top 10 DeFi platforms are now Ethereum Virtual Machine (EVM)-compatible, except for Solana.
As a result, Solana TVL slumped over 25% in the previous month, while Optimism and Arbitrum gained 7 and 12%, respectively.
However, the Networks stood close in market domination: Solana commands 1.75% of the DeFi market, Optimism stands at 1.78%, and Arbitrum controls 1.94%. Solana’s market dominance peaked at nearly 6% on Nov 2, 2021.
What happened?
As CoinChapter reported earlier, most investors and developers don’t trust Solana. Moreover, nearly 33% of the financial experts surveyed by Finder stated that the outages plaguing the network strongly contributed to the eroded trust in the blockchain platform.
Moreover, the Solana Network is susceptible to hacks. The latest heist on Oct 11 took $117 million off the DeFi protocol Mango Markets.
“The attacker manipulated a price oracle; this enabled the attacker to manipulate the price of the protocol’s governance token MNGO and to take under-collateralized cryptocurrency loans,”
commented the Digital Trend on Oct 13.
The attack led to a drop in the Total Value of assets Locked (TVL) on Solana by 24% the day. Furthermore, the listed factors affected the SOL token, which declined to $31.3 on Nov 2 after forming a bearish setup, much like Bitcoin.
SOL Price in Trouble, Technical Analysis Says
In detail, the Solana token formed a setup dubbed the ‘descending triangle.’ The latter entails a dropping resistance and flat support. They enclose the price action and prevent sharp moves in either direction.
Moreover, the descending triangle is a continuation pattern that can forecast a drop equal to the one preceding the formation. SOL has not yet confirmed the pattern and is held above the support line. However, the declining trading volumes suggested a looming drop, congruent with the broader market.
Also read: Solana (SOL) eyes a 70% crash while fake Phantom security updates ravage wallets
If the bearish forecast continues, SOL’s target price will be $10. A 67% decline from the current price of $31.3. Heightened competition from EVM-compatible Optimism and Arbitrum exacerbate the selloff fears.
