Originally published on: October 28, 2024
Solana has made waves by generating more daily network fees than Ethereum, showcasing a surge in user activity on the blockchain. In the past 24 hours alone, Solana has raked in over $2.54 million in fees, outpacing Ethereum’s $2.07 million on Oct. 28. This milestone has propelled Solana to become the fifth-largest fee-generating protocol in the crypto world, according to data from DefiLlama.
The surge in fees on Solana can be attributed to the increased trading activity on Raydium, its leading decentralized exchange (DEX). Raydium alone has generated over $3.41 million in fees on the Solana blockchain in the past day.
Often hailed as an “Ethereum killer,” Solana’s approach to monolithic scaling aims to boost transaction throughput and reduce fees without relying on layer 2 (L2) blockchains. In contrast, Ethereum relies on L2 solutions for scalability, leading to debates on value dispersion between the mainnet and side chains.
While Solana’s recent growth is impressive, it falls short of Ethereum’s overall transaction fees. Ethereum has generated nearly $134.6 million in fees over the past 30 days, solidifying its position as the top blockchain and third-largest protocol by fees. In comparison, Solana generated $61.3 million in monthly fees, accounting for about 45% of Ethereum’s 30-day total.
A significant portion of Solana’s monthly revenue comes from memecoins, with more than 47% attributed to Pump.fun, a memecoin launchpad that contributed around $29.5 million to Solana’s monthly fees. The surge in interest in Solana-based memecoins earlier this year raised concerns among crypto researchers about market overheating and “peak degeneracy” post the launch of Pump.fun.
Despite the popularity of memecoins, the risks associated with memecoin trading are evident, as 98.6% of memecoins on Pump.fun never make it to Raydium for further trading.
Solana’s dominance in daily fees marks a significant milestone in the blockchain world, showcasing its potential as a formidable competitor to Ethereum. With growing user activity and innovative solutions for scaling, Solana continues to attract attention from traders and investors alike. Subscribe to our Finance Redefined newsletter for the latest DeFi developments and financial insights.
