Solana (SOL) gained a new pair on Upbit, with a planned listing against the Singapore dollar. The SOL/SGD pair aims to give easier regional access and more intuitive pricing.
Upbit added a planned Solana (SOL) pairing with the Singapore dollar. The pairing is already in its first hours of trading, and is expected to have regional impact. The initial hours of trading turned over 63 SOL, putting the pair among the bigger gainers on Upbit. The new pair is added to the overall robust trading volumes for SOL, which easily range between $2B and $5B daily.
SOL is already a highly liquid asset, with significant dependence on stablecoins. Fiat pairings against the Korean won and the Singapore dollar will boost direct investments without the need to move through USD denominations.
SOL relies on Tether (USDT) for more than 53% of its trading activity. Additionally, the asset has a significant component of FDUSD activity on Binance, for more than 20% of trading volumes. The stablecoin inflows are also the primary factor for SOL rallies, especially in the case of FDUSD, which is highly concentrated on Binance and controlled by the exchange.
While the SGD listing is niche, it reveals the effect of Upbit in offering highly curated, regulated pairings. Upbit is relatively conservative in listing new assets, and any expansion is closely watched for exposing South Korean investors to new markets. Upbit already carries the recently booming Sui (SUI), while also still listing legacy coins from previous bull cycles.
South Korean exchanges have to comply with the newly introduced Act on the Protection of Virtual Asset Users, requiring extra scrutiny of suspicious activity. Upbit lists a total of 204 currencies in 372 pairs.
SOL corrects below $140
SOL followed the overall market direction, sinking to $138.78 after the overall market correction. Open interest diminished from $2.2B to $1.7B after liquidating $3.95M longs on Binance.
The Solana ecosystem retains its growth rate, expanding its total value locked in the past few weeks. One of the drivers for Solana-based activity is still Pump.fun, the meme token launchpad.
Pump.fun renewed its growth in the past few weeks, with another wave of tokens, as well as new and returning users. The platform keeps launching more than 12K tokens daily, and fees have picked up again as high as 13K SOL daily.
Solana daily active addresses are close to their peak at 3.4M daily, also feeling the effect of Pump.fun. However, the platform is not always a net positive for SOL. Periodically, Pump.fun liquidates its fees, cashing out of SOL and often causing a deeper price slide.
Solana still pressured by token dilution
The Solana network has accepted inflation of over 5% as its usual state, to encourage staking and other forms of locking up SOL. However, the new SOL inflows are not always gradual.
SOL is 95.5% unlocked, but another 13M SOL will enter the market at an accelerated pace in February and March 2025. Additionally, insiders may continue to receive staking rewards, even from still-locked tokens.
The SOL market will still need liquidity to absorb the inflation and the selling of fees and incentives. Some of the recipients may also have a higher probability of selling, as in the case of early contributors or influencers.
Solana’s protocol has built-in inflation growth that will continue for years. The protocol is marking net losses each month, due to the need to pay out between $20M and $33M in incentives to node operators. Solana is also generating inflows for MEV bot services, as well as block building. Priority fees are boosting the bottom line of validators, along with the even larger bribes for guaranteed block inclusion.
Cryptopolitan reporting by Hristina Vasileva
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