Originally published on: October 31, 2024
In the fast-moving world of cryptocurrency, Ethereum has once again proven its dominance by reclaiming a significant portion of outflows from Solana. According to Michael Nadeau, the founder of The DeFi Report, a large chunk of the value that flowed into Solana eventually found its way back to Ethereum.
In a recent post, Nadeau emphasized the importance of Solana pulling total value locked (TVL) from Ethereum and layer-2 networks. Data from crypto platform Artemis revealed that Solana lost around $55 million in TVL to Base, Optimism, and Arbitrum year-to-date.
Nadeau pointed out that despite receiving $2.36 billion in inflows from Ethereum in the same period, over $1 billion flowed back to Ethereum, accounting for 42% of the total outflows. This highlights the strong gravitational pull of Ethereum within the crypto space.
Despite these dynamics, Ethereum remains a powerhouse with over $50 billion in TVL, as reported by data provider DefiLlama. Nadeau explained that although Ethereum experienced $6 billion in net outflows year-to-date, 83% of this money went to layer-2 chains that still operate within the Ethereum ecosystem.
The movement of assets between Ethereum and layer-2 chains is expected to continue driving value to Ethereum’s layer 1, underscoring the interconnected nature of the blockchain ecosystem.
On a noteworthy day in October, Solana surpassed Ethereum in daily fees, generating over $2.54 million compared to Ethereum’s $2.07 million. The spike in fees was attributed to increased activity on Raydium, a popular decentralized exchange and automated market maker on the Solana network.
As the crypto landscape evolves, Ethereum’s resilience and adaptability continue to set the benchmark for blockchain innovation. Stay informed and ahead of the curve with more exciting articles like this – subscribe to the Markets Outlook newsletter for valuable insights into investment opportunities and trading strategies every Monday.
