Solana DeFi Trading Volume Tops Ethereum for the First Time in July—Here's Why

Decentralized exchanges (DEXs) on the Solana network surpassed those on Ethereum in trading volume for the first time in July, marking a significant shift in the DeFi landscape.

Data from DeFiLlama shows that Solana-based DEXs handled $56.849 billion in transactions, accounting for 30% of all crypto DEX volume for the month. In contrast, Ethereum DEXs processed $53.867 billion, capturing 28.12% of the total volume. Solana outperformed Ethereum on 17 days throughout July in terms of daily trading volume.

Frank Mathis, CEO and co-founder of blockchain infrastructure provider GenesysGo attributes this shift to Solana’s growing reputation as “the blockchain of fun and for the people.” Solana has become a popular platform for meme coin launches due to its lower transaction costs compared to Ethereum. Mathis commended Solana for its effective community building and its ability to bridge the gap between developers and users.

This development is noteworthy because Ethereum has traditionally dominated the DeFi sector. The only previous instance of Ethereum DEXs being overtaken in volume was in 2021 by BNB Chain, driven by a surge in meme coin activity. Solana’s recent performance reflects a similar trend, fueled by meme coin mania.

Mathis expressed uncertainty about the long-term impact of meme coins on the broader ecosystem but noted that if this trend continues, it could signal an inflection point for Ethereum. He praised Solana’s ability to make its community feel integral to its success, highlighting its achievements in recent years.

While Ethereum was the pioneer of smart contracts and DeFi, giving it a significant first-mover advantage, the rise of Solana suggests a shift in the DeFi landscape. Mathis anticipates that developers will increasingly aim to make their products compatible with both Ethereum and Solana to capture a broader market.

Despite a slump in 2022 following the collapse of FTX and Alameda, Solana has rebounded and is now a leading platform for new token launches. This shift aligns with a broader trend of decentralized exchanges gaining ground over centralized counterparts, driven by factors like the growth of meme coins and niche assets, as noted by Messari Senior Research Analyst Kunal Goel.

source: https://decrypt.co/242977/solana-defi-dex-volume-tops-ethereum-first-time