Solana (SOL) Price Declines but Initiates Testing of Firedancer Upgrade amidst Increasing Network Activity
Solana is pushing for the testing of its Firedancer upgrade in order to improve transaction speeds, with the goal of achieving up to 1 million transactions per second (TPS). Raydium has also launched a beta version of perpetual futures trading, offering over 70 trading pairs with leverage of up to 40x. Despite a price drop of 11% in 7 days, Solana’s network has shown growth, with a 1.5 million increase in active addresses in 9 days. The Firedancer upgrade by Jump Crypto is considered the biggest test since development began in 2022.
Solana’s development team is expediting the testing phase of the Firedancer upgrade, which aims to enhance the network’s transaction processing capabilities. Validators on the test network have been requested to implement an early version of the upgrade called Frankendancer by the end of this week.
Jump Crypto started working on the Firedancer upgrade in 2022 due to stability challenges faced by the network. The upgrade aims to achieve processing speeds of up to one million transactions per second, which would be a significant increase compared to the current capabilities of blockchain networks.
The price of SOL, Solana’s native token, has experienced a decline of 11% over seven days, falling below $190. This drop occurred after the token failed to break through the $220 resistance level, leading to increased selling pressure.
Despite the price decline, on-chain metrics indicate a growing network participation. The number of active addresses on Solana increased by 1.5 million in early January, demonstrating sustained user interest in the network.
Whale activity has shown a pattern of accumulation, with addresses holding at least 10,000 SOL increasing from 5,025 to 5,098 over five days. This follows a previous decline from 5,096 to 5,025 between December 28 and January 2.
In the DeFi sector, Raydium, the third-largest DeFi protocol on Solana, has launched a public beta for perpetual futures trading. The platform has partnered with Orderly Network to offer over 70 trading pairs with leverage of up to 40x.
The new perpetual futures platform features competitive fee structures, with 0% maker fees and 0.025% taker fees during the beta period. Raydium currently has a total value locked of $2.2 billion, positioning it behind Jito and Jupiter in Solana’s DeFi ecosystem.
Market data shows that DEX-based perpetual products have generated over $650 billion in trading volumes and more than $490 million in fees. Hyperliquid currently leads this market with a 46.3% share.
Technical indicators for SOL show key resistance levels at $228, $243, and $264. The token currently faces immediate resistance at $197, with support levels established at $186 and $175.
The Firedancer testing initiative represents the largest-scale trial of the upgrade to date. Validators are encouraged to participate in the testing phase to ensure network stability and performance improvements.
The development of the upgrade is seen as crucial for Solana’s ability to compete in the broader blockchain market, particularly in attracting traditional financial markets to the platform.
Raydium’s expansion into perpetual futures leverages Solana’s infrastructure to provide gas-free trading and omni-chain liquidity. This puts the protocol in direct competition with other platforms like Arkham, which launched similar products in November.
Current market conditions show a disconnect between network growth metrics and price action. While active addresses and whale accumulation suggest growing interest, these factors have not translated into upward price momentum.
The latest data indicates that Solana’s network continues to attract developer activity and protocol launches, even as the market processes price volatility.
