Crypto: Solana Surpasses Ethereum on a Key Market Metric

On October 28, 2024, Solana generated more daily fees than Ethereum for the first time. This turnaround highlights Solana’s growing appeal to crypto users, who prioritize fast and inexpensive transactions in a sector where efficiency is increasingly valued. Ethereum has long dominated as the benchmark for decentralized applications and smart contracts, so this surpassing symbolizes the rise of new options that challenge its status.

The Rise of Solana Over 24 Hours

On October 28, 2024, Solana reached a significant milestone and surpassed Ethereum in terms of fees generated in a single day, with over $2.54 million, compared to $2.07 million for Ethereum, according to data from DefiLlama. This achievement is primarily based on the increase in transactions on Raydium, the most used decentralized exchange (DEX) on the Solana network, which itself generated $3.41 million in fees during the same period. Solana has always bet on a monolithic scaling approach to maximize transaction throughput and minimize costs, without needing layer two solutions like Ethereum.

This spectacular increase in fees is a key indicator of the growing use of the Solana network. Indeed, the platform increasingly attracts users seeking fast and low-cost transactions, where Ethereum is often criticized for its high fees and reliance on Layer 2 solutions to improve scalability. However, in the long run, Ethereum maintains a central place in the ecosystem, particularly due to the diversity of its decentralized applications (dApps) and its status as a dominant protocol.

A Long-Lasting Domination by Ethereum

Despite this remarkable performance by Solana over a 24-hour period, Ethereum remains, in the long run, the main protocol in terms of fees generated. Over the last 30 days, Ethereum has accumulated nearly $134.6 million in fees, far exceeding the $61.3 million generated by Solana. Over a longer period, Ethereum still demonstrates superiority in terms of fees and user activity, which underscores its leading position despite scalability challenges. This supremacy is largely explained by the fact that Ethereum remains the reference blockchain for smart contracts and decentralized applications, attracting more robust and diverse projects.

Moreover, a significant portion of Solana’s revenue comes from more speculative activities, such as the memecoin market. Indeed, nearly 47% of Solana’s monthly fees, or about $29.5 million, were generated through the Pump.fun platform, a service related to the launch of memecoins. While this indicates a certain excitement surrounding Solana, it raises concerns about the sustainability of this trend. In comparison, Ethereum benefits from a more mature and diverse ecosystem, which protects it from sudden fluctuations related to more speculative markets.

The rise of Solana and its brief overtaking of Ethereum in terms of fees highlight the emergence of new dynamics in the crypto ecosystem. However, Ethereum maintains an edge in the long term due to the robustness and diversity of its network. Solana, with its ability to attract users through fast transactions and low fees, may continue to play a key role in the battle for supremacy, but challenges remain regarding the sustainability of this model.