Solana flips Ethereum on this front, thanks to the memecoins

• There has been a significant rally in DEX activity on Solana in the past few months.
• This is due to the surge in the activity around the meme coins on the network.

Solana’s [SOL] share of the total decentralized exchange (DEX) volume has grown significantly over the past year. In a recent post on X (formerly Twitter), crypto analyst Tom Wan noted that Solana currently holds 29% of the DEX market, compared to Ethereum’s [ETH] 36%.

A year ago, Solana only had a 1.1% market share, while Ethereum dominated with 50%- 70%.

The growth in trading activity across DEXes housed within Solana is attributed to the current memecoin frenzy on the network. This boom began following Pyth Network and Jupiter’s large airdrops, which led to the release of tokens worth around $290 million to Solana’s users. 

New token creation on the network skyrocketed to all-time highs, driven mainly by meme-based assets. As trading activity intensified, the values of Solana-based meme coins, such as dogwifhat [WIF] and Bonk [BONK], climbed to new all-time highs. 

DEXes are the preferred platforms for trading assets of this nature because centralized exchanges often delay their listings due to their significantly volatile nature; hence, the recent growth in activity across Solana-based DEXes as many try to cash in on the current meme coin market rally.

According to Dexscreener data, eight of the top ten trading pairs are meme coins paired with SOL. 

State of Solana

The recent hike in Solana’s DEX activity has led to an uptick in the chain’s decentralized finance (DeFi) total value locked (TVL). 

At press time, Solana’s TVL was $2.90 billion. DefiLlama’s data shows it has risen by 89% year-to-date (YTD). At its current value, the network’s TVL is at a 21-month high, AMBCrypto found.

Despite the high DEX volume in the last month, Solana has seen a general decline in user activity during the past few weeks. Data from Artemis revealed a 21% drop in the daily count of unique wallet addresses signing on-chain transactions on Solana since 31st January.

This decline in demand has led to a corresponding decrease in network fees and revenue. Per Artemis’ data, the total value of daily transaction fees has plummeted by 46% since 1st February.

How much are 1,10,100 SOLs worth today?

For context, at the beginning of February, transaction fees on Solana totaled $1.2 million. However, as of 5 March, the chain saw a total fee of $627,000.

Solana’s revenue from these fees has witnessed a decline as well. As of the 5th of March, revenue derived from transaction fees amounted to $313,000. This also marked a 46% decline from the $584,000 recorded in daily revenue on the 1st of February.