According to data from DefiLlama, the Solana network has surpassed both Ethereum and Base in terms of 24-hour decentralized exchange (DEX) trading volume. As of January 6th, daily trading volume across Solana-based DEXs reached a staggering $3.8 billion, outpacing Ethereum’s $1.7 billion and Base’s $1.2 billion.
The Growing Role of Solana in DeFi
This significant increase in trading volume highlights the expanding role of Solana in decentralized finance (DeFi) and its position as a competitor to Ethereum. The growing popularity of Solana can be attributed to its ability to provide faster transaction times, lower fees, and greater scalability compared to traditional blockchain networks.
Price Performance: Solana Outperforms Ether
From a price perspective, Solana’s SOL token has outperformed Ethereum’s ETH by approximately eight times since 2023. According to data from TradingView, the price of SOL has increased significantly over the past year, while the price of ETH has remained relatively flat.
Total Value Locked (TVL) on Solana
Solana’s total value locked (TVL) is also outpacing Ethereum’s. In 2024, Solana’s TVL rose roughly five times, from around $1.4 billion to upward of $9.5 billion, according to DefiLlama. This significant increase in TVL indicates a growing demand for DeFi applications on the Solana network.
Retail Traders Flock to Solana
The increased popularity of Solana can be attributed to its user-friendly interface and low barrier to entry. Retail traders are increasingly entering the crypto market through Solana, as speculation intensifies around Solana-based memecoins and AI agent tokens, according to Grayscale Research.
Rising Trading Volumes on Raydium
In 2024, 24-hour trading volumes on Raydium, Solana’s leading DEX, increased by more than 10 times, from around $180 million in January to more than $3 billion on December 31st. According to DefiLlama, Raydium beat Uniswap, Ethereum’s leading DEX, in monthly trading volumes by roughly 30%, or approximately $30 billion.
Memecoin Trading Drives Volumes on Raydium
The success of Raydium can be attributed to its dominance within the Solana ecosystem. According to a December report by Messari Research, memecoin trading has become a substantial driver of Raydium’s volume, with memecoins accounting for an all-time high of 65% of Raydium’s monthly volume in November.
The Rise of Memecoins
Fueled by venture capital funding and political speculation, memecoins now command approximately $130 billion in market capitalization, according to CoinGecko. In November, Solana’s top memecoin platform, Pump.fun, was the eighth-highest-earning blockchain protocol, ranking just below giants such as Uniswap and Circle.
Pump.Fun Generates Significant Trading Volume
In the past 30 days, Pump.fun generated nearly $250 million in trading volume, according to data from DefiLlama. After bootstrapping sufficient liquidity, memecoins minted on Pump.fun are typically traded on Raydium.
Conclusion
The Solana network’s growing popularity and increasing dominance in DeFi applications have significant implications for the crypto market. As the demand for decentralized finance continues to grow, it is likely that Solana will remain a major player in the space. The rise of memecoins and AI agent tokens on the Solana platform adds an additional layer of complexity to the ecosystem, but also presents opportunities for growth and innovation.
Related Articles
- DeFi TVL Nears 2021 Highs on Liquid Restaking, Bitcoin L2s
- Your Guide to Crypto in Toronto: Crypto City
Subscribe to Finance Redefined
Stay up-to-date with the latest DeFi developments, sharp analysis, and uncover new financial opportunities with our weekly newsletter. Delivered every Friday, subscribe now and make informed decisions with confidence.
By subscribing, you agree to our Terms of Service and Privacy Policy.
