Has Solana Truly Become an “Ethereum Killer”?

Solana has often been dubbed as an “Ethereum killer” by the crypto community. Looks like it is truly living up to its name as its July trading volume surpassed that of Ethereum.

The trading volume of Solana (SOL) in July hit $55.8 billion, exceeding that of Ethereum (ETH), which stood not far behind at $53.8 billion.

It's the first time in history that Solana’s trading volume has exceeded that of Ethereum any month. As far as trading on decentralised exchanges (DEXs) in July is concerned, 29% of it took place on Solana, followed by 28% on Ethereum.

Arbitrum (ARB), Binance Smart Chain and Base were the next three blockchains with the highest trading volume in July. While Solana, Ethereum, and Binance Smart Chain are Layer-1 blockchains, Arbitrum and Base are layer-2 blockchains. Note that both Arbitrum and Base are Ethereum-based Layer-2 solutions.

The primary reason Solana’s trading volume is soaring is the proliferation of memecoins on the network. These memecoins take off from pump.fun and Moonshot, Solana-based memecoin creation tools that let you quickly create and issue these fun tokens.

Source: DefiLlama

Though most of these tokens fail to see the light of day, the few that have made it to the market have contributed to the rise in trading volume on Solana of late. DEX volume on Solana is led by Raydium with a total value locked (TVL) of $1.09 billion, followed by Drift (TVL of 411.82 million) and Orca (TVL of $256.48 million).

Solana vs. Ethereum... The Battle Goes On

Solana also dethroned Ethereum on another crucial metric, i.e. transaction fees. Solana’s weekly transaction fees during 22-28 July stood at $25 million, while the figure for Ethereum was $21 million during the same week. It’s the first time that Solana’s weekly transaction fees surpassed that of Ethereum.

Solana has been regularly ranked among the top 10 decentralised finance (DeFi) networks in terms of trading volume since mid-2022. Upstaging Ethereum on a few charts can be looked upon as Solana’s another giant step towards cementing its growing influence in the DeFi sector. However, Ethereum is still the leader when it comes to TVL.

Ethereum holds a TVL of $56.8 billion (nearly 60% of overall TVL), while Solana holds a TVL of only $5 billion, barely 5% of overall TVL. If we add the trading volumes of Ethereum and Ethereum-based L-2s, the network is still far ahead of any other DEX.