Solana Blockchain Dominates DEX Volume Surge, Increasing Retail Activity, and Developers' Interest
Summary:
According to venture capital firm Pantera Capital, over 60% of the increased volume in decentralized exchanges in May was on the Solana blockchain due to its unique architecture. The share of DEX volume of Solana surged from 0% in early 2021 to 24% by May 2024, with its design attracting developers of memecoins and decentralized infrastructure projects. Despite past technical challenges, the network aims to enhance reliability and scalability with its forthcoming Firedancer upgrade.
Recent data assembled by venture capital firm Pantera Capital indicates that the Solana blockchain accounted for over 60% of the decentralized exchange volume increase in May. Pantera attributes this expansion to Solana's unified architecture, describing it as the blockchain equivalent of Apple's macOS in a June 20 publication. Its contribution to DEX volume has grown from 0% at the beginning of 2021 to 24% by May 2024, as a consequence of its resemblance to Apple’s macOS approach, which allies software and hardware for optimal performance. Pantera points to Solana’s plan of enhancing every aspect of its blockchain, akin to how Apple vertically integrates its macOS hardware and software, as a significant catalyst for the recent upswing in retail activity.
Pantera has a vested interest in the Solana blockchain, having previously raised capital for a new fund aimed at acquiring up to $250 million in Solana's (SOL) tokens from FTX bankruptcy at a heavily reduced rate.
The rate of unique active addresses on the network surged from 14,000 in October 2020 to almost 1.3 million by May 2024. Consequently, priority fees on Solana have seen an exponential increase, from under $100,000 per month in mid-2023 to over $60 million in March 2024, as disclosed in the report. Additionally, Solana’s design has generated a lot of interest among developers of memecoins and decentralized infrastructure (DePin) projects. The network has witnessed a marked rise in the number of new tokens surpassing other chains like BNB, Ethereum, and Polygon. According to the report, Solana lay claim to 85% of all novel tokens on DEXs, a significant rise from 50% a year prior, reflecting its strong retail application driven by memecoin activity.
Solana's success has positively impacted its SOL token, which CoinMarketCap reveals has seen an over 723% price hike in the past year, currently trading at $123. However, Pantera’s report overlooks some of the problems faced by the network recently, including downtime due to technical issues. The most recent outage occurred on Feb. 9, resulting in almost five hours of inactivity.
Solana's forthcoming Firedancer upgrade, scheduled for a full release in 2025 with simplified versions launching beforehand, is slated to enhance the network’s durability. By increasing Solana's dependability and scalability as activity starts to surge, the upgrade, a standalone validator client under development with Jump Crypto, aims to ensure network outages become a thing of the past.
Published At
6/20/2024 8:30:00 PM
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