Solana has surpassed ethereum in monthly trading volume on decentralized exchanges (DEX) for the first time in cryptocurrency history.
Solana (SOL) DEX volume hit $55.8 billion in July, surpassing on-chain trading activity on ethereum (eth) between July 1 and July 31, according to DefiLlama.
ethereum, the largest decentralized finance chain, recorded $53.8 billion in the same period. Layer 2 networks like Arbitrum and Base and layer 1 blockchain Binance Smart Chain accounted for the largest volume after Solana and ethereum.
<img decoding="async" width="1811" height="750" src="https://crypto.news/app/uploads/2024/08/Screenshot-569.png” alt=”Solana Surpasses ethereum DEX Volume”/>
What drives Solana's volume?
Solana’s historic moment of overtaking ethereum occurred under different circumstances for both networks.
Memecoins gained popularity on the Solana chain last year, with projects like Dogwifhat (WIF) and Bonk (BONK) taking on-chain markets by storm. Many speculative investors became millionaires overnight by staking on these tokens, which were trading at market caps of $1 billion as of August 1.
Celebrities have also gotten into Solana, quickly bringing new tokens to market using tools like Pump.fun and Moonshot. While most of these coins failed, the presence of public figures added momentum to the memecoin meta.
Asset managers such as VanEck have applied to list Solana ETF shares with the U.S. Securities and Exchange Commission. However, BlackRock’s head of digital assets, Robert Mitchnick, said a listing of crypto ETFs beyond bitcoin (btc) and ethereum seemed unlikely.
ethereum's role in the DeFi world and its institutional promise
In contrast, ethereum remains the preferred application layer for building decentralized applications. The largest dapps, such as Aave and Uniswap, were originally native to ethereum.
ethereum gained renewed interest following a technology upgrade that significantly reduced fees, making trading and exchanging on ethereum affordable again. The upgrade, called Dencun, was quickly followed by institutional demand for eth on Wall Street. Issuers such as BlackRock, Bitwise, Fidelity, and Grayscale received SEC clearance to list shares of eth spot exchange-traded funds.
ethereum spot ETFs have been trading for about six days, with Grayscale’s outflows weighing heavily on new supply. According to Nansen, $750 million left the products in the first four of five trading days.
Debates abound over what ETFs mean for the future price of Ether. One perspective suggests that the supply slack caused by ETF buying will boost on-chain staking returns, while others argue that this development is not seen as a boon for the industry.
On-chain data, however, cements ethereum as the leader of the DeFi market. Glassnode reported that daily active addresses on ethereum and its L2s increased by 127% since the beginning of the year.
<img loading="lazy" decoding="async" width="1280" height="879" src="https://crypto.news/app/uploads/2024/08/photo_5861796925387424523_y.jpg” alt=”Solana reverses ethereum DEX volume with $55 billion – 1″/>