Solana has seen significant growth in its decentralized exchange (DEX) volume, surpassing Ethereum in July. With $55.8 billion in transactions, Solana outpaced Ethereum’s $53.8 billion, marking its second-highest monthly volume to date. This surge can be attributed to platforms like Raydium, Orca, and Phoenix, which have contributed to the network’s success.
Despite Solana’s impressive volume numbers, Ethereum remains the leading DeFi platform with approximately 61% of the market share and $67 billion in assets locked. In comparison, Solana only holds 4.64% of the market with a total value locked (TVL) of $5.16 billion. While Solana’s growth is noteworthy, Ethereum’s stronghold in the DeFi space is undeniable.
Solana’s increased DEX volume can be partially attributed to the rise in memecoin activity on the blockchain. From cat-themed tokens to politically-inspired coins, traders have been drawn to these assets, thereby boosting liquidity on Solana. Additionally, institutional endorsements, such as potential ETFs from firms like VanEck and 21Shares, have piqued investor interest and contributed to the network’s growth.
Data from Allium on Visa’s stablecoin dashboard indicates a significant increase in stablecoin transactions on Solana. The USDC stablecoin has seen over $8 trillion in transaction volume since last year, with USDT on the Tron blockchain following closely at $6.5 trillion. This surge in stablecoin usage highlights Solana’s growing importance in the digital asset space.
Despite its growth, Solana’s recent surge in DEX trading has raised concerns about potential market manipulation. A report by the pseudonymous analyst Flip Research suggests that 93% of transactions on the network may be inorganic, driven by wash trading, MEV bots, and scams that offer little value to retail traders. This highlights the need for greater transparency and oversight in decentralized exchanges.
Solana’s rise in DEX volume is a testament to its growing presence in the DeFi space. While the network has made significant strides in attracting traders and investors, it also faces challenges related to market manipulation and wash trading. As Solana continues to evolve, addressing these issues will be crucial in maintaining its credibility and success in the decentralized finance ecosystem.