Solana Surpasses Ethereum in July DEX Trading Volume Amid Wash Trading Worries
The latest data from DefiLlama reveals that the Solana network has outperformed Ethereum in decentralized exchange (DEX) volume for the month of July. Solana recorded DEX transactions worth $55.8 billion, surpassing Ethereum’s $53.8 billion during the same period. This surge marks Solana’s second-highest monthly volume, following its peak of $60.7 billion in March 2024.
The spike in Solana’s volume can be attributed to the significant activity on platforms like Raydium, Orca, and Phoenix. In contrast, Ethereum’s volume is primarily driven by the Uniswap exchange. Despite these impressive figures, Ethereum maintains its position as the leading DeFi platform, commanding around 61% of the market and locking in assets worth $67 billion. In comparison, Solana holds a market share of only 4.64%, with a total value locked (TVL) of $5.16 billion.
What is propelling Solana’s growth? Analysts point to the increasing activity in memecoins as a key driver behind Solana’s rising DEX volume. Over the past year, the blockchain has witnessed substantial growth in various memecoins, ranging from cat-themed to politically inspired tokens, leading to enhanced liquidity as traders seek to capitalize on these assets.
Moreover, institutional endorsements have contributed to the interest in Solana, with speculation surrounding a potential Solana exchange-traded fund (ETF). In June, prominent asset management firms VanEck and 21Shares applied with the US Securities and Exchange Commission (SEC) to establish a spot-based Solana ETF.
Additionally, market analysts have observed a surge in stablecoin usage on Solana. Data from Allium on Visa’s stablecoin dashboard indicates that the transaction volume for the USDC stablecoin on Solana has surpassed $8 trillion since the beginning of last year, with USDT on the Tron blockchain following closely at $6.5 trillion.
However, Solana’s recent surge in DEX trading has raised concerns about potential wash trading. A recent report by the pseudonymous crypto analyst Flip Research suggests that 93% of transactions on the blockchain are not organic. The report highlights that Solana’s daily transactions are heavily influenced by wash trading, MEV bots, and scams, offering minimal value to retail traders.
In conclusion, Solana’s remarkable performance in DEX volume compared to Ethereum, driven by factors such as memecoin activity, institutional endorsements, and stablecoin usage, underscores its growing presence in the crypto space. Despite concerns about wash trading, Solana’s continued growth and market dynamics position it as a significant player in the DeFi landscape.
