The Solana network surpassed ethereum in monthly decentralized exchange (DEX) volume in July, according to data from DefiLlama.
Solana DEX transactions reached $55.8 billion, surpassing ethereum’s $53.8 billion during the same period. This represents Solana’s second-highest monthly volume, after the $60.7 billion peak in March 2024.
Solana’s volume surge is primarily driven by activity on platforms like Raydium, Orca, and Phoenix. In contrast, ethereum’s volume is primarily driven by the Uniswap exchange.
Despite these figures, ethereum remains the leading DeFi platform, with roughly 61% of the market and $67 billion locked in assets. In comparison, Solana controls only 4.64% of the market, with a total value locked (TVL) of $5.16 billion.
What is driving Solana’s growth?
Analysts point to a surge in memecoin activity as a key driver behind Solana’s rising DEX volume.
Over the past year, the blockchain has seen significant growth in various meme coins, from cat-themed tokens to politically inspired tokens. This has led to increased liquidity as traders look to cash in on these assets.
Institutional backing has also fueled interest in Solana, and speculation about a potential Solana exchange-traded fund (ETF) may have contributed to its growth. In June, major asset management firms VanEck and 21Shares applied to the U.S. Securities and Exchange Commission (SEC) to create a spot market-based Solana ETF.
Additionally, market analysts have observed increased usage of stablecoins on Solana. Data Allium’s Visa stablecoin dashboard shows that transaction volume for the USDC stablecoin on Solana has surpassed $8 billion since the beginning of last year, followed by USDT on the Tron blockchain at $6.5 billion.
Concerns about money laundering operations
Meanwhile, Solana’s recent surge in DEX trading has raised concerns about potential wash trading. x.com/Flip_Research/status/1818216739680710776″>report Pseudonymous cryptocurrency analyst Flip Research claims that 93% of transactions on the blockchain are inorganic.
The report indicates that Solana’s daily transactions are heavily influenced by wash trading, MEV bots, and scams, which offer minimal value to retail traders. Flip Research noted:
“If you look at the wallets involved, the vast majority appear to be bots from the same network with tens of thousands of transactions. They generate fake volumes independently, with random amounts of SOL and a random amount of transactions until the project comes to an end, before moving on to the next one.”
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