The amount of money in lending structures on the Solana network is growing explosively, according to a new market report from RedStone. Currently, around €3 billion ($3.6 billion) in coins are locked in smart contracts on the Solana network as collateral for loans. Read more about the state of the Solana network below.
Crypto loans on Solana grow rapidly #
The lending market on the Solana network is growing rapidly, according to the RedStone report. The report states that €3 billion in tokens are now locked in various lending structures on the Solana network. This is a growth of approximately 33% compared to last year, when it was €2.3 billion.
The locked coins are used as collateral for crypto loans. Crypto loans are increasingly popular because they allow users to spend part of the value without having to sell crypto. Additionally, crypto loans are interesting because coins locked in smart contracts cannot contribute to selling pressure on the market.
State of the Solana network #
The growing popularity of lending on Solana can be partly explained by the strong performance of the network. According to the report, the Solana network achieved a transaction speed of 400 milliseconds in the past year, the trading volume on decentralized exchanges peaked at over €30 billion per day, and there were no network outages.
In the lending market, Kamino Lend was one of the major standouts this year. It saw the total value locked in smart lending contracts increase to nearly €3 billion in the past year. Competitor Jupiter Lend, new since August, also stood out with rapid growth to €1.41 billion in tokens in lending contracts. Other players like Drift and Loopscale are also growing, but remain somewhat behind with several hundred million euros.
However, RedStone emphasizes that these figures can give a distorted picture. If you add up the figures of all lending companies, you quickly get more than €3 billion. This is because the report removes double counting for the total value locked in lending structures on the entire Solana network, for example when capital is moved from one lending platform to another.
Tokenization of real-world assets #
Despite the increasing popularity of lending platforms, RedStone expects that most growth in the future will not come from loans, but from tokenization. According to the report, several major financial services providers are planning to tokenize physical assets so that they can be traded as tokens on crypto networks. The report names BlackRock and VanEck, as well as fintech companies like Apollo, Backed Finance, Ondo, and Securitize.
The prospects are therefore hopeful. Now the price still has to catch up, as it is currently at a relatively low level of $138 – significantly less than the peak earlier this year of about $260.