Sol PriceStalls despite Solana’s Defi TVL near record highs

Solana’s Defi Ecosystem is seeing explosive growth and is approaching the highest level ever, but Sol remains behind.

Solana (Sol) collects nearly record-heavy capital, but its prices continue to be lagging behind. On Thursday, August 28th, total debt value locked in Solana reached $11.725 billion, close to record numbers for January. At the same time, Stablecoin’s total market capitalization was $12 billion, while Bridged TVL was $42 billion.

Solana’s Defi TVL and Stablecoin Market Cap | Source: Defilama

But despite the strong indicators, Sol’s price is still at $294.33, far below the January ATH, and is still hovering at around $200. At the time, Solana’s Defi TVL was near its current peak in August, suggesting that Defi TVL and prices began to diverge.

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Why Sol Price is behind the Defi Ecosystem

At the same time, the fees incurred in Solana remained at a relatively modest $1.68 million a day. This is far from the January record of $2,889 million. Low chain revenue is why Sol is behind the growth of resolution ecosystems.

Solana On-Chain Prices | Source: Defilama

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Today, many of Solana’s ecosystem activities are going through platforms that prioritize low-costs. This includes Dex aggregators like Jupiter, who make up a large part of the trading activity in Solana. With these protocols, high TVL equals higher liquidity and better trading conditions.

Still, this does not lead to higher revenues for the Solana network, one of the key metrics of Solana price performance. Higher revenues lead to higher staking rewards, making Solana more valuable. Because of efficiency, Sol may be behind its defi tvl at least until the fees go up.

read more: Solana price forecast: Is Sol losing momentum after an explosive rally?