How High Will SOL Go?

SOL Stumbles. As broader crypto markets failed to recapture yesterday's losses, Solana's native token fell as much as 8.1% off the day’s highs before a partial recovery. Amid the chaos, mSOL, a SOL LST, even briefly depegged. SOL is still seeing major gains this week, but today it was a different L1 ecosystem catching investor attention... 👇

It’s unclear which single event sparked the mSOL depeg, but high demand for looped liquid staking yields combined with a leverage unwind is typically a major contributing factor toward such events. Edgar, a creator at leading Solana money market protocol marginfi, took the opportunity to remind users that the protocol does not assume the peg of assets.

While crypto protocols can take advantage of correlated assets to enhance the capital efficiency of a portfolio (i.e., increase yields via looping), depeg risks that break this correlation can create unexpected solvency risk.

Despite Solana’s struggles, Cosmos ecosystem projects are receiving the bid: modular data availability layer Celesita’s TIA pumped 28.2%, leading DEX chain Osmosis’s OSMO gained 26.5%, and the Cosmos Hub’s ATOM was up 21.3% on the day!

Trading volumes through Cosmos SDK chains are increasing, with dYdX chain processing over $2B in trading volumes since launch and Osmosis demonstrating signs of user acquisition.

The pump may also be attributable to the potentially incoming Cosmos airdrop season.

Among the opportunities are a proposal to fork Cosmos Hub, which would result in an ATOM1 airdrop for token holders, and the TIA staking play, which could position those staking to secure Celestia to receive airdrops from the projects which will utilize it as a data availability layer.