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Solana's (SOL) decentralized finance (DeFi) activity has gained significant momentum, with its decentralized exchanges (DEX) surpassing ethereum (eth) DEX in monthly trading volume. So far in November, Solana-based DEXs have recorded over $100 billion in trading volume, marking a major milestone for the ecosystem.
Solana DeFi ecosystem gains momentum and eclipses ethereum DeFi
Solana, the fourth largest cryptocurrency with a reported market capitalization of $118.34 billion, has been on a record price trajectory. Recently, the digital asset established a new all-time high (ATH) of $263 after hitting a low of $8 at the peak of the FTX fiasco.
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Now, the layer 1 blockchain has reached another milestone as Solana-based DEXs surpassed $100 billion in monthly trading volume for the first time. According data According to DefiLlama, the 30-day cumulative trading volume recorded by Solana DEXes amounts to $116.51 billion.
In comparison, DEXs based on the ethereum mainnet recorded a trading volume of $61.61 billion during the same period. This means that Solana's DEX trading volume was more than double that of ethereum.
Month-on-month (MoM), Solana's DEX volume increased over 100% since October, which stood at $52.5 billion. Meanwhile, the total value locked (TVL) in the Solana DeFi ecosystem has increased to $9.3 billion, up from $6.23 billion a month ago.
The unprecedented increase in trading volume of the Solana-based DEX can be attributed to several factors. These include the current memecoin frenzy, low blockchain transaction fees, and an intuitive user interface.
It is worth noting that Solana's TVL has not yet surpassed its ATH TVL of $10.02 billion, which was recorded almost three years ago in November 2021. In January 2023, the blockchain's TVL reached a low of $210 million, dragged by the broader crypto bear. market exacerbated by the fall of the FTX exchange.
At the time of writing, $3.58 billion of Solana's TVL is tied to liquid staking protocol Jito, while Jupiter DEX holds $2.4 billion. Another prominent Solana-based DEX, Raydium, represents $2.37 billion of TVL.
Where is SOL headed?
Solana's growing user adoption has played a crucial role in driving the recovery of its native token, SOL. Year to date (YTD), SOL has gained over 157%, going from $101 on January 1 to $263 on November 23.
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Despite such extraordinary returns, crypto experts remain bullish on SOL and expect further gains for the digital asset. According to a recent analysis According to Titan of crypto, SOL may reach $400 as it appears to be breaking out of a prolonged cup and handle pattern.
Additional bullish factors, such as declining bitcoin (btc) dominance and the increasing probability of a Solana exchange-traded fund (ETF), could further propel SOL to new highs. SOL is trading at $248.31 at press time, up 0.5% in the last 24 hours.
Featured image from Unsplash, charts from DefiLlama.com and Tradingview.com
