In July, the overall trading volumes on DEX in DeFi on Solana surpassed those of DEX on Ethereum’s layer-1.
In total, the trading volume of DEX on the Solana chain was 55.876 billion dollars, while on the Ethereum chain it was slightly lower (53.868 billion).
These data, however, do not take into account the volumes recorded on layer-2.
The boom of Solana in DeFi: surpassed Ethereum in volumes
The boom in trading on Solana is mainly due to two factors.
The first is the low fees, much lower compared to those of Ethereum on layer-1.
The second is the enormous quantity of memecoin that are created on Solana.
Indeed, on this subject, some doubts have been raised.
In fact, by analyzing on-chain transactions, it was discovered that the average daily number of transactions per single public address is really very high, almost ten times that on Ethereum.
These are moreover very high numbers, which suggests that they may have been largely generated by bots.
It is therefore possible that the boom of Solana was partly generated by large quantities of transactions created by bots. These transactions concern memecoin that are created and traded on DEX, so it is a dynamic that should have also impacted the trading volumes on decentralized exchanges.
The volumes on the exchange
Examining the trading volumes on centralized exchanges of SOL and ETH, the two native cryptocurrencies of Solana and Ethereum, it is discovered that Solana not only has not surpassed Ethereum, but it hasn’t even come close.
In the last thirty days, the overall trading volumes of ETH on spot markets have exceeded 600 billion dollars, while those of SOL have just surpassed 125 billion, almost five times less.
This difference is such that it cannot even be compensated by the memecoin, given that the overall monthly of the main memecoin on Solana, dogwifhat (WIF) was only 15 billion dollars.
Therefore, the overtaking occurred only on the DEX, and only on layer-1.
The fact is that the boom in transactions being recorded on the Solana chain starting especially from mid-July seems to have really been caused, or heavily influenced by bots, while nothing similar is observed on the Ethereum chain.
The layer-2
To this must be added that, after Solana and Ethereum, the highest trading volumes in DeFi are being recorded on Ethereum’s layer-2 Arbitrum, which reaches a figure of about half compared to Solana and Ethereum.
This constitutes an additional element of reflection.
Solana is in fact widely used due to its very low fees. But now even some Ethereum layer-2s, such as Arbitrum or Base, have extremely low transaction costs.
At this point, one wonders why many continue to prefer Ethereum over Arbitrum, or other layer-2 solutions, but if you add up the trading volumes of the four main layer-2 solutions of Ethereum (Arbitrum, Base, Polygon, and Optimism), you get values similar to those of Ethereum and Solana.
Therefore, those who opt for the use of layer-2 do not always use the same one, and this makes such analyses more complex.
In other words, if we add Ethereum’s layer-2, the trading volumes in DeFi turn out to be about double compared to those on Solana.
On centralized exchanges, however, Ethereum still dominates unchallenged.
The rise of Solana in DeFi: memecoins attract volumes from Ethereum
That said, Solana, however, now dominates DeFi among altcoins different from Ethereum.
In the past, this domain was held by BS, the blockchain of Binance, which, however, has faced strong competition from Solana in recent years.
Even on centralized exchanges, the trading volumes of BNB are less than half compared to those of SOL.
In other words, BSC tried to challenge Ethereum but without managing to surpass it, while Solana first challenged BSC surpassing it, and now it is challenging Ethereum.
The fourth wheel might not be Avalanche, as was thought until last year, but TON of Telegram.
The crypto SOL and ETH
It is worth noting that in addition to this, the price of SOL has shown to have greater volatility compared to that of ETH, and this is very appealing to speculators.
Examining the trend over time of the price of SOL expressed in ETH, that is, their ratio, it is discovered that from the implosion of the crypto Terra/Luna ecosystem in May 2022 to December of the same year SOL had lost a lot compared to ETH.
However, starting from October of last year, a true climb began, which brought the price of SOL from 0.014 ETH to the current 0.052 ETH.
Furthermore, until mid-December 2023, this parameter had consistently risen, while since then it has fallen and risen three more times.
These mini-cycles seem to last two months, even though the first one lasted four.
From March to today, there has practically always been a month of decline for SOL compared to ETH followed by a month of recovery, twice.
High volatility is not a symptom of a particularly mature market, but on the other hand, Solana is still a relatively young project, whose DeFi exploded only last year.
