Key Takeaways:
- Solend protocol's fiasco might boost SOL, expert says.
- Solana's booming NFT trade could be a large contributing factor.
- SOL still traded 86% below its ATH.
YEREVAN (CoinChapter.com) – Solana has a healthy network usage, says crypto analyst Mike Fay, considering the controversy with Solend, the platform’s largest lending protocol. Thus, SOL looks like a ‘buy the dip’ opportunity at $36, despite its 86% drop from the all-time high of nearly $260 in Nov. 2021.
Solend fiasco opened doors for SOL?
As CoinChapter reported, Solana saw a billion dollars of SOL liquidations on the line as a whale deposited $170 million in SOL on Solend and borrowed $108 million in Ethereum (ETH) and stablecoin USDC.
SOL liquidation price would stand at $22.27.
Meanwhile, the token price on Jun. 22 stood at $35 and stove off the FUD for the time being. However, concerns about the instability of the Solana ecosystem persisted as the protocol attempted to overrun the whale. As a result, the community voted twice on the proposal, declining it after the second vote.
However, Mike Fay saw a potentially positive outcome in the controversy.
Not only does Solana have a smaller top protocol dominance figure compared to every other top 5 DeFi blockchain, but even the top 3 protocols are better diversified than Solana’s DeFi network peers. I think this is a good sign, especially in light of the Solend’s liquidation fears.
said the expert.
Also read: Potential SOL liquidation on Solend Protocol puts Solana at risk.
Additionally, Fay pinpointed several bullish cues to back his opinion. According to the expert, Solana’s successful NFT trading made a compelling argument.
Solana’s booming NFT trading
The analyst singled out that the leading NFT marketplace OpenSea was integrating with Solana as a prime catalyst for the platform’s success.
In detail, OpenSea has primarily been an Ethereum-based marketplace with Polygon (MATIC) integration. Fay asserted that the OpenSea-related exposure would help boost Solana NFT adoption.
The metrics for Solana NFTs are strong. But the biggest driver of that growth has probably been Solana-native NFT marketplace Magic Eden rather than OpenSea.
commented the analyst.
Also read: Solana price jump more than 41% in a week after latest upgrade.
According to DappRadar, Magic Eden has witnessed considerable usage growth since early April. Furthermore, since then, the number of traders on Magic Eden within 30 days grew 151%, and sales volume jumped 290%.
Does Solana uphold NFT competition with Ethereum?
The expansion into the NFT space drew inflow from capital investment firms, as Solana’s Magic Eden secured $130 million in Series B funding headlined by Greylock Partners and Electric Capital. This gives the Solana-based trading platform an implied valuation of $1.6 billion, assessed the expert.
As a result, Solana’s daily NFT buyer figures have been closing the gap with Ethereum’s over the last few weeks.
Though both are seeing declines, likely because of the carnage in the crypto market, Solana has actually had more daily NFT buyers over the last two days. The monthly transaction figures tell a story as well
said Fay.
Also read: Solana (SOL) follows crypto rally reversal, drops 16.67%.
Conclusion
Despite the successful NFT trading, Solana (SOL) suffered a heavy blow from the crypto carnage. As a result, the SOL/USD exchange rate stood at $36, an 86% drop from the all-time high of nearly $260 in Nov. 2021.
However, experts think Solana could not only survive through the Solend controversy but bring investors solid gains. The third quarter market conditions will show if buying the SOL dip is a profitable investment.
