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In the last 24 hours, the volatility in Solana‘s price led to the liquidation of a significant number of long positions in the futures market on centralized exchanges. This volatility resulted in the liquidation of over $6 million in long positions, totaling over $7 million. 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 reaching $126 million across various centralized exchanges.
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 fell after reaching the highest level in 12 months during the first week of January. The value of the economic trading volume of SOL and SPL tokens on the Solana blockchain network dropped from approximately $47 billion to $34 billion within a week.
Moreover, other data shows that the number of active addresses on the Solana network has fallen from the annual high of around 981,000 seen on December 21 to current levels of around 599,000.
Notable Development on the Solana Network
Solana network had previously announced that Aave’s governance body was considering a proposal to deploy Aave v3 on Neon EVM, a smart contract platform that enables Ethereum dapps on the Solana network.
This proposal, made by the Neon Foundation and Aave Chan Initiative, aims to expand Aave’s lending services as a minimum viable product within the Solana ecosystem. Currently, Aave community members are 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 test network.
