It has been exactly one year since the Solana Foundation organized the first Breakpoint conference, bringing together developers, innovators and other influential industry figures who are enthusiastic about the Solana project.
Over the weekend, the high-speed layer 1 network held its second annual Breakpoint conference, enlivening it with several major announcements. The warm reception of the event inspired mild positive price action for the SOL token, which traced a brief relief towards $38 on the first day of the conference after raking double-digit gains.
Builders welcome announcements from the Breakpoint 2022 Conference
The previous edition of this community-oriented conference held in Lisbon last November kicked off at a time when the price of the Solana native token (SOL) was pacing off the charts. The token price had just touched an all-time high of $260 on Nov. 6, following a second breach of $200 a month earlier. The steep ascent preceding this record peak included an overwhelming 425% gain streak in four weeks between Aug. 11 and Sept. 9.
SOL/USD 7-day trading chart
In the past dozen months, however, the SOL token price has dumped in the bear market, losing as much as 88% of its value, according to market data. The SOL/USD pair was at writing, hovering at $31.80 order block, down 12% on the day.
Embrace the worst in the market despite positive developments
Though analysts remain optimistic that the crypto bear market is ebbing away, the light at the end of the tunnel for SOL holders could yet be far ahead. For the better part of this year, Solana’s fortunes have sat in stark contrast to the picture in Q3 2021 – as has been the case for many other altcoins. Worrying for Solana backers, the network has registered a series of outages, casting doubts on the previous projection that it would evolve to become ‘the Visa of crypto.’
The SOL market has also displayed weakness in momentum retention. The 7-day SOL/USD trading chart shows that the token has given up nearly all the gains accrued ahead of the Breakpoint conference on Friday. Remarking on Solana’s price action in a recent podcast, Solana co-founder Anatoly Yakovenko maintained that the market price shouldn’t be a major bother as the broader ecosystem is poised for more growth. Perhaps the most recent development is the weekend’s announcement of Google Cloud becoming a validator.
Google Cloud partners with Solana
In addition to running a block-producing, the cloud service provider revealed it would be introducing support for Solana on the Blockchain Node Engine to help non-savvy users manage their nodes on the cloud. Specifically, it will allow potential validators to effortlessly set up dedicated Solana node in the clouds by securing them and facilitating node operations. Through the announcement post, Google Cloud also relayed that it will index Solana data and move it to its BigQuery offering for ease of access.
Solana co-founder concedes that unreliability is the network’s biggest challenge
Speaking at this year’s conference on Saturday, Yakovenko highlighted the poor uptime track record as a major shortcoming to address. Solana has experienced downtimes at least ten times this year, including three incidents of network instability and degraded performance in January. Notably, the network went down at least twice every month between March and June. The latest incident of severely degraded performance due to a misconfigured node at the end of September extended into October as the Solana validator operators scrambled to address it.
“Whenever you improve on one of [performance, security, throughput, and decentralization], you may actually hurt […] the other ones but I think we’ve done an amazing job in solving a bunch of those.”
The Solana co-founder pointed out on Saturday that these outages, attributable to sluggish block times, inflict a handicap on the network.
“You’re in very tough competition with Google, Facebook, and all these other applications, and that’s not the kind of experience we want to provide,” he remarked.
Highlighting this challenge as a growth deterrent, Yakovenko assured that the outage issue is set to be mitigated by updates on the horizon. Last month, Yakovenko described the upcoming Firedancer validator client being developed by the Solana Foundation in partnership with Web3 startup Jump Crypto as a potential long-term fix for the network’s scaling issues.
Solana NFTs flourish as DeFi ecosystem sees bleak activity
Like most blockchains, Solana has struggled to register any meaningful development in its decentralized finance (DeFi) niche this year against declining market prices. The total value locked (TVL) across all Solana protocols has contracted from just over $10 billion during last November’s rally to $886.72 million at writing.
Solana TVL
At its current rankings, Solana faces competition for liquidity from Ethereum layer two networks, including Optimism which has an equivalent figure of $872.05 million. Arbitrum, another Optimistic roll-up initiative, has a slightly higher TVL of $1.08 billion, bringing the heat to layer-one projects like Avalanche.
Still, there is a generally positive mood within the broader Solana ecosystem, at least in the non-fungible tokens (NFT) market, where the blockchain has fared well in terms of sales volumes. The number of average unique buyers and sellers of Solana NFTs has also increased since last November. There have been more than 100,000 monthly unique buyers of Solana NFTs thus far this year, except for August, when the reported figure of 95,516 buyers was just shy of the mark.
Solana NFT sales and unique buyers
CryptoSlam data also shows that the number of new sellers has remained above 100,000 consistently since February. October figures of 173,408 unique buyers and 204,731 unique sellers set multi-month highs, but the total transactions recorded across the market decreased by more than half from September. These propitious figures, fueled by the growing popularity of collections like DeGods and y00ts, breed superficial bullish sentiment for Solana.
The upcoming developments that promise answers to existing challenges could also help Solana retake its mudded reputation. That said, the network’s DeFi ecosystem will likely continue facing an uphill task in recovery whilst price struggles and liquidity remain low.
To learn more, visit our Investing in Solana guide.
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