As an analyst with over a decade of experience in the crypto market, I must admit that the rapid growth and development of Solana has been nothing short of impressive. The fact that it has surpassed Ethereum in daily network fees is a significant milestone, indicating a strong user base and high transaction activity. However, my cautionary hat goes on when I look at the longer-term statistics. While Solana’s recent surge is commendable, Ethereum still leads in terms of monthly fees earned, nearly doubling Solana’s figures.
In the last 24 hours, Solana’s network fees have outpaced those of Ethereum, raking in approximately $2.54 million, surpassing Ethereum’s $2.07 million on October 28. As a result, Solana now ranks fifth in terms of fee income among all blockchains in the cryptocurrency market, according to DefiLlama data.
The surge in Solana can primarily be attributed to the heavy usage of its primary decentralized exchange, Raydium. In a single day, Raydium generated approximately $3.41 million in transaction fees.
Solana is frequently seen as a potential “rival” to Ethereum, mainly because of its robust strategy for handling scale and its capability to boost transaction speed while minimizing expenses, all without relying on second-layer (L2) scaling methods.
Conversely, Ethereum handles escalated network activity through secondary layer (L2) scaling methods. Yet, there are opinions suggesting that this structure may potentially diminish the robustness of its primary network.
Previously this year, analyst Dan Smith from Blockworks stated on platform X that “Solana could surpass Ethereum in terms of transaction fees and captured MEV as early as this month, possibly even within the next few days.
The term “MEV,” or Maximal Extractable Value, denotes additional earnings that users might gain by utilizing sophisticated trading methods on blockchain platforms such as Solana, beyond what standard transactions would provide.
Although Solana has significantly increased its daily transaction fees, it’s important to note that over a 30-day period, Ethereum still outperforms Solana. In fact, during this timeframe, Ethereum generated approximately $134.6 million in fees, which is almost twice as much as Solana’s earnings of around $61.3 million.
Approximately half the transaction fees on the Solana network during its most recent period were attributed to the trading of meme tokens on the Pump.fun platform, which generated approximately $29.5 million in fees for the network within the last month.
Furthermore, this expansion has occasionally strained the Solana network’s capabilities. In fact, an unexpected spike in memecoin trading earlier this year resulted in about three-quarters of Solana’s transactions failing.
On the 4th of April, Solana encountered a period where it couldn’t process transactions for approximately five hours, highlighting ongoing hurdles it encounters as it scales up to cater to growing user demands.
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2024-10-28 18:29