Solana Surpasses Ethereum in DEX Volume, Reaching $55 Billion
Solana has achieved a significant milestone in the world of cryptocurrencies by surpassing Ethereum in monthly decentralized exchange (DEX) trading volume for the first time.
In July, Solana’s DEX volume reached $55.8 billion, outpacing the on-chain trading activity on Ethereum, which recorded $53.8 billion during the same period, according to DefiLlama. Following Solana and Ethereum, Layer-2 networks like Arbitrum and Base, as well as the L1 blockchain Binance Smart Chain, accounted for the most trading volume.
The driving force behind Solana’s surge in trading volume can be attributed to various factors unique to the network. Memecoins gained traction on Solana’s chain last year, with projects like Dogwifhat (WIF) and Bonk (BONK) making waves in on-chain markets. Speculative investors saw substantial gains, with some becoming millionaires overnight by investing in these tokens, which boasted billion-dollar market caps as of August 1.
Additionally, celebrities have entered the Solana ecosystem, introducing new tokens to the market through platforms like Pump.fun and Moonshot. While many of these coins did not succeed, the involvement of public figures added momentum to the memecoin trend.
On the other hand, Ethereum continues to serve as the primary application layer for decentralized applications. Major decentralized applications (dapps) such as Aave and Uniswap originated on the Ethereum network. Ethereum experienced a resurgence of interest following a technological upgrade, known as Dencun, which significantly reduced fees, making trading and swapping on the platform more cost-effective.
Institutional demand for Ethereum also increased, with issuers like BlackRock, Bitwise, Fidelity, and Grayscale receiving SEC approval to list spot ETH exchange-traded fund shares. Despite the introduction of spot Ethereum ETFs, Grayscale outflows have impacted the new offering, with $750 million exiting products in the initial trading days.
Debates are ongoing regarding the implications of ETFs on Ether’s future price. Some experts suggest that ETF buying could lead to supply dormancy and boost on-chain staking yields, while others argue against viewing this development as a significant industry advantage.
Nevertheless, Ethereum remains a dominant force in the DeFi market, as evidenced by data from Glassnode showing a 127% increase in daily active addresses on Ethereum and its Layer-2 solutions since the beginning of the year.
