Solana climbs 8% in 24 hours: Is the new network upgrade the reason?

    The project mentioned that the v1.17.31 update on the MainnetBeta would resolve the congestion issues.
    SOL’s price increased but on-chain activity slowed down.

Following a number of days with no action, Solana (SOL) has now rolled out an update intended to address network congestion issues.

Based on Solana Status’ latest announcement, validators on MainnetBeta are now able to employ the v1.17.31 upgrade. This version includes the essential enhancements required to address the network congestion issues.

Solana climbs 8% in 24 hours: Is the new network upgrade the reason?

No more clogging

Recently, users encountered challenges completing transactions on the Solana network. According to an investigation by AMBCrypto, this issue was largely caused by the increasing number of memecoins being developed and used on the platform.

During the persisting issue, Solana examined potential solutions from the 12th of April onwards. Simultaneously, Anza, a development team in the network, rolled out a Testnet upgrade (v1.18.1) aimed at addressing the problem.

A review of Solana’s network performance indicated that it had been running smoothly with an impressive uptime of 99.77%, or almost continuously, over the past three months.

During this period, it appeared opportune to tackle the issue at hand. The reason being, SOL and other meme tokens on the platform experienced price growth within the previous 24 hours.

At the moment this press release was written, SOL saw a 4.68% rise in value. Meanwhile, Bonk (BONK), the memecoin centered around dogs on the network, experienced growth, and WIF (dogwigfhat) followed suit.

After the update, there’s a strong probability that the cost of Solana (SOL) could rise due to heightened interest and demand for the token. However, it’s crucial to consider this potential development carefully by examining relevant on-chain data.

Based on information from TheBlock, the number of active Solana addresses has dropped. Currently, there are approximately 1.17 million active addresses. This represents a significant decline when compared to the first week of April.

Solana climbs 8% in 24 hours: Is the new network upgrade the reason?

Additionally, according to Hello Moon, a Solana blockchain explorer, the quantity of digital assets transferred on the chain was relatively small.

Are users about to demand more SOL?

In other words, while the passage of the resolution could potentially lead to an increase in SOL, it’s important to keep in mind that this may not happen right away. If the network activity remains low, then the anticipated surge in SOL prices might not materialize.

An opposite scenario brings in more active users, potentially boosting the token’s worth. Additionally, AMBCrypto examined another measurement called Total Value Locked, or TVL.

As of now, Solana’s total value locked stood at approximately $3.68 billion. This represented a decrease of 22.83% over the past week. The TVL figure serves as a measure of a project’s vitality.

Solana climbs 8% in 24 hours: Is the new network upgrade the reason?

A larger metric value signifies more assets being secured, while a smaller value indicates less commitment to liquidity for earning yields.

As a result, there was a reduction in the number of assets being added to blockchain-based protocols by market participants.

Realistic or not, here’s WIF’s market cap in SOL terms

However, the condition might change depending on the reaction of the market to the recent upgrade.

If users find that the network functions optimally after testing, the Total Value Locked (TVL) could potentially grow. Conversely, if the network underperforms and users notice a lack of functionality, they may continue to withhold liquidity from Solana.

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2024-04-15 16:08