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Is Solana’s high transaction fee affecting network activity? 

February 26, 2024
in Altcoins
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Posted: February 26, 2024


  • Solana’s revenue increased over the last three months. 
  • SOL’s price action was bullish, but market sentiment remained bearish. 

2024 has been optimistic for Solana [SOL], as it quickly gained a substantial amount of market capitalization.

While the token’s price surged, another key metric also climbed up, which might harm the blockchain’s stats. 

A look at Solana’s network activity 

Latest datasets revealed that Solana’s average transaction fees have risen sharply over the past few months. The blockchain average fee crossed $0.03, way more expensive than average L2s. 

Source: X

High transaction fees might hurt network activity, as users might execute fewer transactions because of the high cost. Therefore, to see whether this was the case with Solana, AMBCrypto checked Artemis’ data.

Our analysis revealed that despite high transaction costs, SOL’s daily active addresses remained relatively high throughout the last three months. 

Source: Artemis

A similar increasing trend was also noted in terms of its daily transaction count. This proved that users were willing to pay high transaction costs on Solana.

The high fees also had a positive impact on the blockchain’s captured value. This was evident from the rise in its revenue, which spiked sharply on the 31st of January.

However, the graph started to decline during the following days. 

Source: Artemis

Apart from that, things in the DeFi space also looked pretty optimistic. AMBCrypto reported earlier that SOL’s TVL reached the $2 billion mark as it displayed consistent growth in the metric since December 2023. 

Solana investors are rejoicing

Solana’s performance on the price front also remained promising last month. According to CoinMarketCap, SOL was up by more than 17% in the last 30 days.

See also  Ethereum NFT monthly sales climb to 10-month high - What now?

At the time of writing, SOL was trading at $102.91 with a market capitalization of over $45.3 billion, making it the fifth-largest crypto.

The good news was that SOL’s development activity was high, reflecting efforts made by developers to improve the blockchain. However, despite the massive price rise, SOL’s social volume dropped last month.

Notably, bearish sentiment around the token was dominant in the market. 

Source: Santiment


Read Solana’s [SOL] Price Prediction 2024-25


Nonetheless, the derivatives market metrics looked bullish on Solana. For instance, Solana’s Binance Funding Rate was green. This meant that Futures investors were actively buying SOL.

Its Open Interest also remained high, indicating that Solana’s growth spree might continue.

Source: Santiment

Next: Ethereum reclaims $3,000 for the second time in February

READ ALSO

CryptoGames now supports Tether (USDT) for deposits and announces partnership with Bitinvestor

Toncoin heats up: What does $398M in trading volume indicate?

Avatar

Journalist

Posted: February 26, 2024


  • Solana’s revenue increased over the last three months. 
  • SOL’s price action was bullish, but market sentiment remained bearish. 

2024 has been optimistic for Solana [SOL], as it quickly gained a substantial amount of market capitalization.

While the token’s price surged, another key metric also climbed up, which might harm the blockchain’s stats. 

A look at Solana’s network activity 

Latest datasets revealed that Solana’s average transaction fees have risen sharply over the past few months. The blockchain average fee crossed $0.03, way more expensive than average L2s. 

Source: X

High transaction fees might hurt network activity, as users might execute fewer transactions because of the high cost. Therefore, to see whether this was the case with Solana, AMBCrypto checked Artemis’ data.

See also  Bitcoin Bull Flag Could Predict 10% Surge To $77,000, Analyst Explains

Our analysis revealed that despite high transaction costs, SOL’s daily active addresses remained relatively high throughout the last three months. 

Source: Artemis

A similar increasing trend was also noted in terms of its daily transaction count. This proved that users were willing to pay high transaction costs on Solana.

The high fees also had a positive impact on the blockchain’s captured value. This was evident from the rise in its revenue, which spiked sharply on the 31st of January.

However, the graph started to decline during the following days. 

Source: Artemis

Apart from that, things in the DeFi space also looked pretty optimistic. AMBCrypto reported earlier that SOL’s TVL reached the $2 billion mark as it displayed consistent growth in the metric since December 2023. 

Solana investors are rejoicing

Solana’s performance on the price front also remained promising last month. According to CoinMarketCap, SOL was up by more than 17% in the last 30 days.

At the time of writing, SOL was trading at $102.91 with a market capitalization of over $45.3 billion, making it the fifth-largest crypto.

The good news was that SOL’s development activity was high, reflecting efforts made by developers to improve the blockchain. However, despite the massive price rise, SOL’s social volume dropped last month.

Notably, bearish sentiment around the token was dominant in the market. 

Source: Santiment


Read Solana’s [SOL] Price Prediction 2024-25


Nonetheless, the derivatives market metrics looked bullish on Solana. For instance, Solana’s Binance Funding Rate was green. This meant that Futures investors were actively buying SOL.

See also  Bad News Sandwich: Solana Activity Spikes (👍) The Fed Could Tank Markets (👎) ETH Could Double (👍)

Its Open Interest also remained high, indicating that Solana’s growth spree might continue.

Source: Santiment

Next: Ethereum reclaims $3,000 for the second time in February
Tags: ActivityaffectingFeeHighnetworkSolanasTransaction

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Memecoin Project Obama6900 (OBX) Joins the Fight Against Malaria with Long-Lasting Insecticidal Nets (LLINs)

October 28, 2023
Tezos 2023 Outlook: An Overview of Tezos (XTZ)

Tezos 2023 Outlook: An Overview of Tezos (XTZ)

November 2, 2023
UK risks regulating NFTs the wrong way, says Mintable CEO

UK risks regulating NFTs the wrong way, says Mintable CEO

October 30, 2023
Capturing the Growth of Asset-Backed Finance via Blockchain-Enabled Opportunities

Capturing the Growth of Asset-Backed Finance via Blockchain-Enabled Opportunities

August 3, 2024
How to Earn Keys to Boost Your HMSTR Airdrop

How to Earn Keys to Boost Your HMSTR Airdrop

September 10, 2024

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EDITOR'S PICK

Ava Labs bets on India for Avalanche growth, with new hires from Polygon and OKX

Ava Labs bets on India for Avalanche growth, with new hires from Polygon and OKX

October 21, 2023
Short Term Pain, Long Term Gain.

Short Term Pain, Long Term Gain.

July 24, 2024
Ethereum Whale Double Holdings To 43% Post-Merge

Ethereum Whale Double Holdings To 43% Post-Merge

January 18, 2025
Crypto market’s weekly winners and losers – CORE, PENDLE, W, FLOKI

Crypto market’s weekly winners and losers – CORE, PENDLE, W, FLOKI

April 7, 2024

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