Solana has beaten Ethereum in monthly DEX trading volume for the first time ever. In July, SOL hit a whopping $55.876 billion in trading volume , while Ethereum trailed behind with $53.868 billion.
This is a big deal, especially considering Ethereum has always been the top dog in this space. But other chains are making waves too. Arbitrum clocked in at $24.569 billion, BSC at $17.888 billion, and Base at $15.554 billion.
But let’s focus on what’s making SOL shine right now.
Why Solana is winning
So, why is Solana suddenly kicking Ethereum’s ass? A big part of it is speed. SOL can process thousands of transactions per second.
Compare that to Ether, which can only handle about 15 transactions per second. That’s a massive difference for traders. Another reason is the cost. SOL’s transaction fees are super low, even when the network is busy.
On the other hand, Ethereum’s gas fees can get pretty high, which turns off a lot of users who don’t want to pay through the nose for every little transaction.
Credits: DeFi Llama
Scalability is another big win for SOL. It uses a unique consensus mechanism called Proof of History, combined with Proof of Stake. This setup lets it handle a high volume of transactions without compromising on decentralization or security.
Ethereum, meanwhile, has struggled with scalability issues for a while, though its creator Vitalik Buterin is doing everything in his power to fix that.
Developers love Solana because it’s cost-effective. Building and deploying smart contracts on Solana is cheaper and faster than on Ethereum.
SOL’s market dynamics
In the last few months of 2023, Solana started outperforming Ethereum in several ways. One of the most noticeable areas was meme coins.
Solana-based meme coins deliver way higher returns compared to those on Ethereum. Celebrity endorsements and strong community support have boosted their popularity by a big margin.
For instance, the meme coins had an average return of 8,469% in the first quarter of this year, while Ethereum’s were around 962%. This insane performance attracted a ton of speculative capital to SOL.
Solana also has a huge number of active daily addresses, over 1.6 million, which is more than any other blockchain, including Ethereum.
