Solana (SOL) continued its upward momentum in the third quarter of 2024, witnessing a significant rise in investment activity, even as on-chain usage experienced a slight decline. According to the State of Solana: Breakpoint Edition report, 29 projects built on the Solana blockchain secured a total of $173 million in private funding during Q3 2024. This marks the highest investment level since Q2 2022, with consistent month-on-month growth throughout the quarter. Notably, September’s inflow of $103 million was the strongest monthly figure since June 2022.
Tokenized Treasury Market Thrives on Solana
Solana’s tokenized treasury market has also expanded rapidly, doubling in value to $123 million in just 30 days, largely driven by a $50 million USDC influx from Ethereum on September 23. While Solana currently ranks third in tokenized treasuries—behind Ethereum’s $1.6 billion and Stellar’s $422 million—the blockchain shows immense potential for growth.
Significant developments include Hamilton Lane launching the first private credit fund on Solana in late July, and Franklin Templeton, with $1.7 trillion in assets under management, planning to introduce a money market fund on Solana. Once live, Franklin Templeton will become the first asset manager to issue securities on Solana through a public SEC registration statement.
Additionally, Securitize, a digital asset securities firm, announced native support for Solana at the Breakpoint conference in late September, further boosting the blockchain’s appeal for tokenized asset deployment.
BlackRock and Ondo Drive Institutional Interest
In May 2024, BlackRock partnered with Securitize to launch the BlackRock USD Institutional Digital Liquidity Fund (BUILD), which currently holds over $522 million in assets under management. One-third of BUILD’s on-chain supply serves as reserves for Ondo’s OUSG fund, which expanded to Solana at the end of 2023. This could potentially accelerate the adoption of Solana among institutional players.
On-Chain Activity Declines Amid Institutional Growth
Despite the rise in institutional interest, Solana’s on-chain activity has declined over the past six months. Monthly transaction fees have dropped by 66% from their March 2024 peak, though they remain significantly higher than a year ago, showing an increase of nearly 1,900%. Solana’s market share of transaction fees grew to 25% in July, a significant jump from the prior year when its share never exceeded 1.5%.
Solana ranks third in terms of total transaction fees, with $260 million over the last six months, behind Ethereum’s $752 million and TRON’s $268 million. However, Solana maintains a competitive edge with low average transaction fees, which stand at $0.02, compared to Ethereum’s $3.58 and TRON’s $0.22.
SOL’s Price Surge and Total Locked Value
As of October 7, 2024, Solana’s total locked value (TVL) is $5.6 billion, reflecting steady growth since January 2024. Additionally, Solana’s native cryptocurrency SOL has experienced a price surge, now trading at $148, up over 15% in the last 30 days.
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