Two High-Signal On-Chain Metrics Are Skyrocketing on Solana: What It Means for the Future of DeFi

Two of the highest signal on-chain metrics are skyrocketing on Solana right now. In this article, I’ll break down what these metrics are, how to interpret them, and what this means for Solana’s future in decentralized finance (DeFi). I’ll also touch on some risks that could negatively impact Solana’s price. Remember, this is not financial advice but purely educational content to help you with your own research.

Let’s dive in.

High-Signal Metrics: Why These Matter

The metrics I’m discussing today are different from the usual ones like Total Value Locked (TVL), transaction count, or active addresses. Those metrics can often be faked or inflated in various ways. Instead, I’ll focus on two metrics that are much harder to manipulate:

1. Stablecoin Supply
2. App Revenue

Let’s break these down one by one.

1. Stablecoin Supply

The stablecoin supply on a blockchain reflects how much “real money” is being moved onto it. Most stablecoins are backed by real dollars or dollar-equivalents (like short-term treasuries), which makes this metric harder to manipulate compared to tokens inflating TVL through circular financial engineering.

Historically, Solana has struggled in this area. As recently as December, Solana had fewer stablecoins than Binance Smart Chain or Arbitrum. For a platform aiming to compete in DeFi, this was a glaring weak point.

However, this has changed dramatically. Over the past month, Solana’s total stablecoin supply has doubled, increasing 51% in just the past seven days. In dollar terms, the supply has grown from $6 billion on January 15 to over $11 billion today.

What’s even more significant is that Solana’s stablecoin supply is now growing faster—both in percentage and absolute terms—than Ethereum’s. For example, between January 15 and now:

• Ethereum’s stablecoin supply grew by under $2 billion.
• Solana’s supply grew by $5 billion in the same period.

This signals that real money is flowing into Solana’s ecosystem at a rapid pace.

2. App Revenue

App revenue is the total revenue generated by all applications on a blockchain. This metric is essentially a measure of economic activity and is difficult to fake because it’s based on real users spending real money.

For a long time, tracking app revenue was nearly impossible. My personal website was among the first to track this data consistently. Today, tools like DeFiLlama offer dashboards to monitor this metric more easily.

In recent weeks, Solana’s app revenue has been on a tear. Here’s the trajectory:

• Two weeks ago: $75 million
• Last week: $150 million
• Four weeks ago: $53 million

That’s nearly a 3x growth in a month. Comparing Solana to other blockchains:

• Solana app revenue: Over $10 million in the last 24 hours
• Ethereum app revenue: Just under $8 million
• Other chains like Binance Smart Chain, Avalanche, and Arbitrum: In the hundreds of thousands

Solana’s app revenue is now significantly higher than Ethereum’s, indicating that the size of its active economy is larger at the moment.

Why This Matters

Metrics like TVL or transaction count measure certain aspects of a blockchain but can be misleading. App revenue, however, combines both dollars and activity in a way that’s difficult to fake. Solana’s rapid growth in this area suggests a thriving ecosystem with high user engagement.

Risks to Consider: Upcoming Unlocks

Despite these positive metrics, there are risks that could affect Solana’s price in the short term. Specifically, there are significant token unlocks coming from the FTX estate. Here’s what the unlock schedule looks like for the next few months:

• February: 3.2 million SOL tokens
• March: 7.5 million SOL tokens
• April: 2.7 million SOL tokens

In total, that’s 15.7 million tokens unlocking, worth nearly $4 billion at Solana’s current price of $250 per token.

Will this flood the market and tank Solana’s price? It’s hard to say. Much of this supply was sold to ecosystem players or sophisticated investors who may not sell immediately. However, the risk of short-term volatility remains.

Final Thoughts

Solana’s on-chain metrics—stablecoin supply and app revenue—are showing explosive growth, signaling that its ecosystem is thriving. However, the looming token unlocks could create downward pressure on the price in the near term.

For those interested in staying updated on metrics like these, I share Daily analysis, insights, and token unlock schedules in my newsletter at Techincomhub.com.

If you enjoyed this article and want more insights like this, be sure to follow along for future updates.

Until next time,