Solana Stimmy Szn has arrived!

Earlier this month, Oracle Network Pyth and DEX aggregator Jupiter announced its airdrop program, while Solana’s largest tokenless protocol platform, Jito, a liquid proof-of-stake platform, announced its token on Monday.

With three major projects announcing airdrops of tokens to users, will this influx of wealth be enough to inject life into Solana’s DeFi ecosystem, especially when its total value locked (TVL) is drier than the Sahara Desert?

Today, we’ll dive into the impact of these airdrops and explore whether this is just the beginning of the Solana airdrop craze?

Underperforming TVL

Market participants have been eager to snap up SOL since 2023, however, their greedy desire to drive up the token’s price has not evolved into a desire to participate in Solana’s DeFi ecosystem.

Although SOL has risen 500% year-to-date, its price growth has far outstripped TVL's growth.

Solana's USD-denominated TVL is up 200%, which may seem impressive, but is still $1 billion below FTX's pre-crash bottom line, and is only a stopgap measure for SOL-denominated TVL, which has been rising this year. SOL-denominated TVL has dropped by 45%!

Solana’s next chapter

Top Solana protocol plans to distribute tokens via airdrops to its most active on-chain users. As newly acquired tokens circulate on Solana, the resulting injection of TVL will help increase the valuation of the entire Solana ecosystem.

The arrival of the airdrop on Solana may not make TVL outperform on price as the two are positively correlated metrics, but it should put upward pressure on both numbers and may be the one that actually drives SOL-denominated TVL growth in 2024 the power of!

Blast's sudden rise demonstrates the ability of airdrops to attract TVL, an L2 project that rewards "points" to users who deposit funds into multi-signature accounts ahead of its mainnet launch in February. Despite launching just last week and not yet launching a product, Blast's TVL managed to briefly surpass Solana's TVL.

The arrival of the airdrop is a key component in launching a potential Solana supercycle and is one of the easiest ways to attract users to the chain!

Users of the EVM chain are eligible to participate in the Pyth airdrop. However, to claim the airdrop, they must download a Solana native wallet to receive their Solana native assets, which can then be used within the Solana native DeFi protocol. EVM recipients of the PYTH airdrop may represent Solana’s net new users!

Airdropping tokens also helps attract attention to projects, and coverage of the Solana airdrop reminded users and developers that cool applications exist on the chain. This goes a long way towards establishing Solana as a viable ecosystem and alternative to Ethereum.

The main points

The arrival of “Solana Stimmy Szn” may herald the revival of the Solana DeFi ecosystem, but this outcome is not guaranteed. Although some top projects may be preparing for large-scale airdrops, the number of successful and innovative Solana protocols capable of conducting airdrops is very few. Not much.

Liquidity is still stuck on Ethereum, as protocols like Blast attract hundreds of millions of dollars in TVL based solely on vague promises of airdrops and dubious innovation, incentivizing developers to build there. Therefore, Solana will face a tough competition in terms of protocol, liquidity, and users.

Due to its low-fee environment, global state machine, and ability to deliver consensus at the speed of light, Solana promises to unlock new application areas not possible on Ethereum, and hopefully they will be here soon!

While the hype cycle of the airdrop and the wealth effect it generates will likely be enough to attract new ecosystem players to Solana and support key statistics, to succeed from the airdrop, Solana must cultivate its own DeFi ecosystem and be ready to Various protocols for airdrops.

Perhaps the airdrop will be the catalyst for another wave of Solana protocols. Unfortunately, however, the current depth of tokenless protocols on the network is impressive, greatly diminishing the benefits the airdrop could have on the Solana ecosystem.