Meme coins on Solana are booming, making it known as “the blockchain of fun and for the people,” according to one expert. In July, decentralized exchanges (DEXs) on the Solana network surpassed those on Ethereum in trading volume for the first time.
According to DeFiLlama data, Solana surpassed Ethereum in overall trading volume for decentralized exchanges (DEXs) in July and led in daily trading volume on 17 days of the month.
Solana Surpasses Ethereum in DEX Trading Volume for July
Solana-based protocols were responsible for 30% of all crypto decentralized exchange (DEX) volume in July, whereas Ethereum followed with 28.12%. In numbers, Solana’s DeFi ecosystem saw its exchanges process $56.849 billion worth of transactions, while Ethereum exchanges finished the month at $53.867 billion, making a difference of over 5%.
Frank Mathis, CEO and co-founder of blockchain infrastructure provider GenesysGo, believes this trend stems from Solana positioning itself “as the blockchain of fun and for the people.” In recent months, Solana has become the leading destination for meme coin launches due to its lower costs compared to Ethereum.
“Solana has done an amazing job of building community and bridging the gap between the developer community and the community of users,” Mathis added.
What makes this development particularly notable is that Ethereum has long been the undisputed king of DeFi. The only other occasion when Ethereum DEXs were overtaken in volume was by BNB Chain, previously called Binance Smart Chain (BSC), back in 2021. That happened in the middle of BSC meme coin mania, presaging the Solana surge that has greatly contributed to the network’s recent spike in trading.
“Of course, meme coins are this cycle’s meta,” Mathis said. “Whether that turns out to be a good thing or a bad thing in the long term for the broader ecosystem remains to be seen.”
“If this trend continues, then I think we will start to realize more and more that the Ethereum ecosystem is at an inflection point,” Mathis added. “Solana has done an amazing job of making the people in its community feel like they are a part of something bigger than themselves.”
Ethereum’s First-Mover Advantage and Solana’s Rebound
Ethereum is the network that first introduced smart contracts, which are chunks of code that can power autonomous, decentralized applications (dapps). This innovation set the stage for the development of DeFi and DEX protocols, giving Ethereum a significant first-mover advantage over other blockchains.
Mathis noted that this advantage will likely result in developers working to make their products compatible with both Ethereum and Solana to capture as much market share and user attention as possible.
Solana saw soaring popularity and price action in 2021 but lost momentum and a significant amount of its SOL token price in late 2022 amid the collapse of the closely linked crypto exchange FTX and its sister trading firm Alameda. However, the network started to rebound last year and is now the leading destination for newly launched tokens of all sorts.
Broadly, centralized crypto exchanges are slowly losing ground to their DeFi counterparts. Messari Senior Research Analyst Kunal Goel pointed out that multiple factors are fueling DEX market share growth, including the growth of meme coins and long-tail assets.
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