Solana Overtakes Ethereum in DEX Volume Amidst a Tumultuous July

July 2024 has been a monumental month for Solana. SOL saw immense price fluctuations coupled with ground-breaking activity levels across its network. Solana’s price skyrocketed to $193 before jumping back down. This price surge prompted a 21% increase in market capitalization, shooting it up to $78 billion. Analysts cited growing anticipation regarding potential ETF approvals in the winds and widespread market optimism as factors impacting the market movement.

However, the defining moment of the month was Solana surpassing Ethereum’s daily decentralized exchange transaction (DEX) volume for the first time. Raydium, the leading DEX on Solana, single-handedly accounted for over $30 billion of the $55.87 billion total swaps on Solana networks over the past month. This milestone upholds the blossoming popularity of Solana’s high-performance blockchain among fintech founders. Solana has also shown a big jump in network activity, with non-vote transactions up to 46 million on the 7-day moving average, its highest level since January 2022. Active wallets increased by 22% to 54.33 million, and new wallet setups grew by 15%.

Solana has always been famous for its NTF activity, but July was a different game. With the broader market slumping, Solana’s nonfungible token (NFT) space has managed to hold up relatively well, with sales rising by 30% compared to June. More research shows that the average transaction per active address was above 30 for Solana on a daily basis, indicating newfound attention from investors. This sharply contrasts with Ethereum, where the average user made only two daily transactions. 

The cherry on top was Binance’s request for removal from the SEC’s list after formally retracting its demands for Solana, Cardano, and Polygon to be classified as securities. This helped remove some of the regulatory overhead around Solana, making it easier for the platform to get traction in mainstream use cases. Yet, the debate on Solana ETFs is still making rounds in the crypto world. The lack of substantial interest in other crypto ETFs (beyond Bitcoin and Ethereum) from investment giant BlackRock, Grayscale, might eventually cool the current enthusiasm around Solana-related offerings. However, Franklin Templeton, one of the first movers on a U.S. spot Bitcoin ETF, might be considering (behind closed doors) a Solana ETF as it believes strongly enough that this asset could also be successful.