Solana tokens see gains amidst weeklong crypto slump
Despite a soft market backdrop, Solana DeFi tokens showed relative strength, with Sanctum leading the pack
Khim_memory/Shutterstock and Adobe modified by Blockworks
This is a segment from the 0xResearch newsletter. To read full editions, subscribe.
Crypto markets are ending the week on a muted note, with BTC giving back part of its rebound and equities largely flat ahead of next week’s FOMC meeting. Against this backdrop, Solana ecosystem tokens showed remarkable relative strength.
BTC retraced part of its recent rebound on Thursday, closing down -1.38%, though it remains up nearly 10% from Monday’s $84,000 intraday low. As seen below, the S&P 500 and gold were flat on the day, while the Nasdaq slipped -0.14%.
On the macro front, Kevin Hassett now appears to be the frontrunner for Fed Chair, with Polymarket pricing his nomination at roughly 75%. Currently the Director of the National Economic Council and a close Trump ally, Hassett’s appointment would mark a clear shift toward tighter alignment between Fed policy and the administration’s economic agenda. As for the current Fed, a December rate cut is almost certain just five days ahead of the final FOMC meeting of the year, with the CME FedWatch tool assigning an 87% probability to a 25 bps cut.
Regarding cross-sector performance, the only three crypto-related indices that were positive on the day were Miners (+6.1%), Solana Eco (+1.8%), and Crypto Equities (+0.9%). Even with Thursday’s bounce, the Miners index is still down 28% over the past 30 days, making it the worst-performing index after Memecoins (-33%).
Looking at Solana ecosystem tokens, amongst the top 10 components on our index, CLOUD (Sanctum) was the best-performer yesterday (+13%). The move comes after Forward Industries launched its own LST (fwdSOL) powered by Sanctum earlier this week. Back in May, DeFi Dev Corp. launched dfdvSOL, also using Sanctum’s infrastructure.
Instead of natively staking SOL and losing liquidity, an LST enables Solana DATCOs to earn staking yield while distributing their liquidity into other DeFi applications to expand yield earnings. Working with Sanctum, DATCOs can easily design and deploy their own LSTs to fulfill their mandate of increasing SOL per share. The Forward Industries team has bootstrapped fwdSOL with ~25% of their SOL holdings (represented by over 1.7 million fwdSOL), leading to an all-time high of 13.1 million SOL locked in Sanctum LSTs.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
