Only Ethereum accounts for a larger share of the trading volume on decentralised exchanges than Solana does.
Last month, Solana captured 25% of the $179 billion worth of crypto trading on DEXs, while Ethereum controlled 31%, data from DefiLlama shows. At the start of the year, Solana’s share was 16%, and Ethereum’s was still 31%.
In a report published on Tuesday, crypto hedge fund Pantera Capital said the increase in share is coming from retail traders who speculate on memecoins. They are drawn to Solana by its low transaction fees.
From dog- and cat-themed tokens to so-called politifi memecoins ― tokens inspired by political figures ― Solana has experienced an influx of liquidity from traders looking to make bank from these viral cryptocurrencies.
Solana has accounted for 85% of all new tokens traded on DEXs since the start of the year, another sign that is picking up volume from memecoins.
As a result, Pantera said that Phantom, a Solana wallet used to connect to DEXs on the network, has become the most dominant app on the iOS store.
“For a crypto wallet to become the most downloaded app in the entire US app store is a remarkable feat, pointing to massive mainstream adoption of Solana,” Pantera said in its report. “This retail influx is closely intertwined with the memecoin trading boom on Solana DEXs.”
Base gains
While Solana’s growth in DEX volume share is significant, rival networks are gaining momentum.
Base, an Ethereum layer 2 blockchain started by crypto exchange Coinbase, is also gaining market share thanks in large part to its low transaction fees.
Last month, asset manager Franklin Templeton predicted that Base will control a major share of user activity among rival Ethereum layer 2 networks.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
