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Solana Monthly Analysis—May 2022

Solana (SOL) price continued with a descending path in May, having already charted consecutive monthly losses since the start of the year. The native token on Solana shed approximately half its value last month, dipping from $89.75 at the beginning of the month to $45.95 on the last day. Market data as of May 31 showed that SOL had lost about 73% since the start of the year and was trading 82% below its all-time high.

Here’s a look at other metrics defining the network’s performance last month:

Market Metrics

Market capital

The market capital of the Solana network fell across May just as the rest of other layer 1 blockchain tokens. The coin’s market capital hit a monthly high just five days into the month, reaching $31.6 billion. Thereafter, the decline was continuous but much steeper in one instance between May 10 and May 12.

The token logged a monthly low figure of $13.85 billion on May 12, after which it saw a brief reprieve and then resumed the downtrend. Bullish sentiments in the market towards the end of May saw Solana recover and its market capital reach $15.73 billion on the last day of the month.

circulating supply

The circulating supply of the Solana blockchain continued increasing in May.

There were 334,007,958 tokens in circulation at the beginning of the month when SOL was trading at $89.75. Though the price of SOL nearly halved to $45.95 on May 31, the concurrent circulating supply grew to 339,529,772 SOL, translating to a 1.65% rise in the overall supply.

Tokens, transactions, and account metrics

Daily non-vote transactions

The daily number of non-vote transactions was 10.39 million at the start of the month but then carved out a non-uniform falling pattern. The most significant spike was seen in the early days of the month – May 4 – which had 25.29 million non-vote transactions. The least count was observed about a week later, when the count shrunk by more than 15 million from its peak, reaching 9.07 million non-vote transactions on May 12.

Daily active wallets and daily new token accounts

The number of daily active wallets on the network grew almost consistently over the month, barring the dip seen due to the massive sell-off in the market between May 8 and May 13.

At the start of the month, there were 949.96k wallets which was a monthly low on Solana, and it grew continuously, reaching 1,335.93k wallets on May 8. A five-day slump then sent the figure down to 996.39k wallets on May 13 Tracking the day-to-day changes shows that the wallet number peaked on May 26 when there were 1,370.6 active wallets.

tokens

Solana Program Library (SPL) is the token standard on the Solana blockchain, which executes a common implementation for Solana tokens – fungible tokens (SPL tokens) and non-fungible tokens (NFTs).

Daily new SPL tokens (excluding NFTs)

The number of daily new SPL tokens on the Solana blockchain was 64 at the start of the month, growing to reach a monthly peak of 189 tokens on May 8. Towards mid-May, the number of newly minted tokens struck the lowest for the month , with only 57 new tokens logged on May 15.

Except for a few instances, the number of new SPL tokens remained below 150 for the entirety of May. This defied the network’s performance in the previous month of April.

Daily new NFTs

The number of new non-fungible tokens (NFTs) created on Solana in May redefined a new peak for the year in what was one of the best performing periods for this token class. The highest daily new NFTs were created on May 18, when the network registered 128.26k new non-fungible tokens.

The lowest count of newly minted NFTs, 34.85k on May 13, was nearly four times less than the peak value for the month. Notably, Solana’s peak in May also counted as the second-highest sum in the all-time high.

Daily SPL token transfers (including NFTs, excluding wrapped SOL)

A single token account on Solana ‘usually’ conducts several SPL token transfers (successful transactions). This explains why token transfers are typically in millions while there are ‘only’ hundreds of thousands of active token accounts.

The daily SPL token transfers across May reflected the market changes that rocked cryptocurrencies. The peak in user token transfers of 7.43 million was clocked on May 11 – notably around the ‘expected’ May 13 date.

Following this high, the count in transfers tapered off towards the end of the month. On May 30, this figure reached 4.3 million transfers before recovering to 4.78 million on the last day of the month.

Daily SOL transfers (including SOL and wrapped SOL)

The total count of SOL and wrapped SOL transfers weakened until mid-May, after which it steadied as the month ran its course. For context, on May 1, Solana recorded a monthly low of 2.29 million SOL transfers, which then rose to 5.14 million on May 4, the highest count for the month.

Thereafter the count went on freefall until around mid-month. Despite falling close to the monthly minimum (2.61 million transfers on May 13), SOL transfers recovered in the last few days of the month.

Network Metrics

Daily network fees for non-vote transactions

The all-time total fees incurred by users engaging in non-vote transactions reached 79,859.7 SOL in May. At an average of 0.0000053 SOL per non-vote transaction, this marked a meager increase from April’s 0.0000052 SOL.

The single-day highest network fee logged for successful non-vote transactions was recorded on May 4, when the network reached a sum of 138.31 SOL. The lowest amount that Solana users paid of all days of the month was the 52.62 SOL observed on May 12. Afterwards, the fees steadily increased towards the end of the month and had reached 101.1 SOL by May 30, 50% higher than the monthly minimum but still 27% off the peak.

Daily active vote accounts

The number of total daily active vote accounts has historically increased consistently by the day. This trend continued in May, from 1,729 active vote accounts on the first day of the month to 1,786 on the last day. Overall, May saw a net increase of 57 in the count of daily active vote accounts compared to 89 more accounts in April.

DeFi performance

Total Value Locked (TVL)

Solana charted a falling pattern in Total Value Locked (TVL), revisiting September 2021 levels – the last time the network recorded a value below $4 billion in this metric. Towards reaching the lowest TVL all year, the chain enjoyed a good start, much like other chains, hitting a monthly TVL high of $6.36 billion on May 5.

By May 28, this figure was 40% down from the monthly high to $3.85 billion – a monthly low. Notably, Solana’s TVL change in May slotted into a pattern of continuous dipping to extend a pattern that runs as far back as November last year.

Market share

In April, at the end of which Solana had a 3.17% market share, Solana retained its fifth position ranking despite seeing a plummeting market share. Across May, the story was pretty much the same, only that Solana didn’t take advantage of the disintegrating Terra blockchain (which initially ranked third) to gain footing in the market space.

On May 1, Solana’s market share sat at 3.07%, the monthly low. As of the 30th, the network’s share had reached 3.73%. However, the chain still ranked 5th, having been eclipsed by Tron, which raced past it to replace Terra as the third-ranked chain.

Protocol’s performance

The overall downturn in total value locked on the Solana DeFi ecosystem was mirrored in its leading protocols. As of the end of May, decentralized cross-trading platform Mango Markets was the only one of the top ten protocols to record a positive monthly change (2.82%), placing its TVL at $158.74 million. Algorithmic decentralized lending/borrowing platform Solend, the lead protocol, had $559.87 million in TVL – 13.78% down on the month.

To learn more about Solana, visit our Investing in Solana guide.

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