3 key Solana metrics explain exactly why SOL price is down
The past eighty days have been moderately bearish for cryptocurrencies as the altcoin market capitalization declined by 16%. The downside movement can be partially explained by the United States Federal Reserve’s quantitative tightening, rising interest rates and the halting of asset purchases. Although they are aimed at curbing inflationary pressure, the policy also increases borrowing costs for consumers and businesses.
The downfall of Solana’s SOL (SOL) token has been even more brutal, with the altcoin facing a 29% correction since August. The smart contract network focuses on low fees and speed, but the frequent outages highlight a centralization issue.
The latest setback occurred on Sept. 30 after a misconfigured validator halted blockchain transactions. A duplicate node instance caused the network to fork, as the remaining nodes could not agree on the correct chain version.
Recently, Solana co-founder Anatoly Yakovenko placed his bets on Firedancer, a scaling solution developed by Jump Crypto in partnership with the Solana Foundation. Dubbed the long-term fix to the network outage problem, the mechanism should be ready for testing in the coming months.
On Oct. 11, Solana-based decentralized finance exchange Mango Markets was hit with an exploit of over $115 million. The attacker successfully manipulated the value of MNGO native token collateral, taking out “massive loans” from Mango’s treasury.
Solana’s primary decentralized application metric started to display weakness earlier in November. The network’s total value locked (TVL), which measures the amount deposited in its smart contracts, broke to its lowest level since September 2021 at 30.4 million SOL.
There are other factors that influence Solana’s decrease in
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