In the last 24 hours, the volatility in Solana‘s price led to a substantial liquidation of long positions in the futures market of centralized exchanges. This volatility resulted in the liquidation of over $7 million in positions, including over $6 million in long position trades. According to data from blockchain analytics firm CoinGlass, the crypto market saw over $88 million in long positions liquidated in the last 24 hours, with total liquidations across various centralized exchanges reaching $126 million.
The Liquidation Crisis in Solana
Liquidations in the futures markets occur when an investor’s position is automatically closed because there are insufficient funds to cover the losses. This situation arises when market movements are unfavorable for the investor’s position, leading to the liquidation of the initial margin or the amount set by the investor.
According to data from The Block’s Data Dashboard, the trading volume of Solana-based tokens also declined after reaching the highest level in 12 months during the first week of January. The value of the economic transaction volume of SOL and SPL tokens on the Solana blockchain network dropped from approximately $47 billion to $34 billion within a week.
Furthermore, according to other data, the number of active addresses on the Solana network also fell from the annual high of around 981,000 seen on December 21 to the current levels of around 599,000.
Notable Development in the Solana Network
The Solana network had previously gained attention when Aave’s governance body considered a proposal to deploy Aave v3 on Neon EVM, a smart contract platform on the Solana network that enables Ethereum dapps.
This proposal, made by the Neon Foundation and Aave Chan Initiative contributing to Aave, aims to initially expand Aave’s lending services as a minimum viable product within the Solana ecosystem. The Aave community members are currently in the review phase, where they can share their opinions and feedback on the proposed integration.
If the process is approved, the deployment will allow Aave’s lending services to utilize Solana’s liquidity. According to the proposal, a version of Aave v3 is already available on Neon EVM’s developer-focused testnet.
