Solana may be overvalued right now, but that is not problem for altcoin
In 2021, Solana experienced substantial growth due to the advocacy of Sam Bankman-Fried , a prominent figure in the blockchain industry. This entrepreneur's efforts effectively elevated the altcoin's visibility, contributing to its success.
The impact of Sam Bankman-Fried on Solana was significant, to the extent that the altcoin was often referred to as"Sam's cryptocurrency." Unfortunately, when SBF's, the SOL token experienced a dramatic drop, losing 60% of its market capitalization within a week. This decline was further exacerbated by the suspension of projects on the Solana network.
It aims to compare the total value of assets on the platform with the total value of assets locked as collateral for decentralized financial protocols. A higher MC/TVL ratio implies a higher degree of utilization and trust in the DeFi platform. When a network's MC/TVL exceeds 1.0, it suggests an overvaluation of the network, which can result in a price correction.
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