The Solana (SOL) network has seen 26.5% growth in total value locked (TVL) since the dawn of 2023, crossing the $259 million mark, despite some dents to its reputation caused by the FTX and Alameda Research collapse.
Although the current TVL falls short of its all-time high of $10 billion, the growth is viewed as a positive sign, considering the network’s various challenges, including outages.
According to CryptoCompare’s latest asset report, Solana’s TVL growth is a “positive sign for the ecosystem” when compared to other blockchains, with the exception of Kava.
Kava saw its TVL grow by over 36.5% in March, compared to Solana’s 16.5% growth and Tron’s 11.4%. Binance’s BNB Chain saw a 6.15% growth over the same period. In contrast, Fantom and Avalanche witnessed almost negligible growth in their TVL, with only a slight 0.53% and 0.91% rise in TVL, respectively.
Diverse ecosystem drives Solana’s growth
Solana’s diverse ecosystem, including DeFi and NFT offerings such as Claynosaurz, Pixel Boy, and Moo Doo, has been a significant driver of this growth.
Solana is competing with Ethereum in the smart contract hub market and has positioned itself as one of the most adaptable layer-1 protocols. The company is also diversifying its core business by launching its own crypto phone, the Saga, in Q1 2023, making it the first layer-1 blockchain to do so.
However, the Solana team has faced concerns regarding the network’s reliability, including a significant 18-hour outage in February 2023. To improve network stability, one-third of the core engineers will focus on enhancing the network throughout 2023, supported by a six-point strategy to refine the network update process.
Institutional investors shift focus to altcoins, including SOL
Institutional investors are backing away from cryptocurrency investment products offering exposure to dominant digital assets like bitcoin (BTC) and ethereum (ETH). However, they are instead wagering on products that expose them to altcoins, such as XRP, solana (SOL), litecoin (LTC), and polygon (MATIC).
Despite BTC’s price hike, institutional investors ditched BTC-related products, causing an outflow of $113 million this past week. Conversely, XRP products had $400,000 in inflows, and products with exposure to SOL, MATIC, and LTC saw $200,000 in inflows each. Ethereum products had outflows of $13 million last week.
This article first appeared at crypto.news