Journalist
Posted:
- Paxos received approval from NDFS to expand to Solana.
- Solana’s price soared, but development activity on the network fell.
Solana [SOL]has seen tremendous growth in terms of price and interest in its protocol in recent weeks. This led many to question the rally’s longevity.
However, a recent development around the Solana ecosystem may help establish the bullish narrative around SOL.
Paxos buys the Solana hype
On December 22, Paxos announced the expansion to Solana, marking the first step towards a new blockchain for its stablecoin, USDP, which initially launched on Ethereum.
The New York Department of Financial Services has reportedly approved Paxos’ initiative, which will allow the public to access USDP on Solana in mid-January 2024.
Walter Hessert, Head of Strategy at Paxos, emphasized the importance of supporting Solana, saying:
“The expansion of our stablecoin platform to support Solana marks an important step toward making stablecoins ubiquitous for everyday consumers.”
In addition to USDP, Paxos managed the issuance of BUSD until NYDFS ordered its creation halted. After this, a significant portion of the BUSD in circulation has been redeemed. Paxos has also partnered with Paypal to issue PYUSD stablecoin.
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Breaking News: Paxos expands to Solana@Paxos, the leading regulated blockchain and tokenization infrastructure platform, will benefit from Solana’s powerful architecture and plans to offer the USDP stablecoin to the public in mid-January. 2024.https://t.co/PkFUByXcXb
pic.twitter.com/NPKMR7EtL8
— Solana (@solana) December 22, 2023
Currently, USDP ranks ninth in terms of market capitalization. Moreover, Binance is the most active exchange for USDP, with the highest trading pair being USDT.
SOL is reaping the benefits of this
These factors can more positively influence the inflow of stablecoin into the network.
New data has revealed an increase in both the market capitalization and growth of Solana’s stablecoin. Notably, stablecoin inflows, especially in December, exceeded previous months, marking the first consistent increase in months.
These factors have allowed SOL to see growth.
Is your portfolio green? View the SOL Profit Calculator
At the time of writing, SOL was trading at $98.52 and the price had risen by more 17.41% in the last 24 hours. The volume on which SOL traded also peaked during this period.
However, development activity around the network declined significantly during this period. This meant that developers weren’t contributing to Solana’s GitHub as often as before.
Source: Santiment