Solana Gains Ground on Ethereum: How It’s Altering Blockchain Dominance

Sentiment Status: Positive

Developers are increasingly deploying projects on Solana, drawn by its lower fees and faster transaction speeds.

The Solana blockchain surpassed Ethereum in several critical metrics, challenging its dominance in decentralized finance. Solana's decentralized exchange (DEX) trading volumes recently reached 266% of Ethereum’s, processing more than double the volume of its rival. This has driven Solana to command 36% of the total DEX market share over the last week and a 46% in the past 24 hours.

While memecoins initially drove activity, Solana is now attracting interest in broader DeFi applications, evident in its total value locked (TVL) surging 500% this year, from $1.4 billion in January to $8.4 billion today.

New Integrations and Stablecoins 

Recent integrations bolstered Solana’s position. On November 20, Sky announced the launch of USDS, a DeFi-focused stablecoin, exclusively on Solana. This stablecoin is now integrated with prominent Solana DeFi protocols such as Raydium, Jito, and Drift.

Additionally, Wormhole, a bridging solution between Solana and Ethereum, showed the significance of this development: It enables native $USDS transfers between Ethereum and Solana, maintaining liquidity across chains.

Revenue and Adoption Metrics 

Beyond DEX volumes, Solana is outshining Ethereum in protocol revenue. Solana’s protocol fees have nearly doubled those of Ethereum in recent months. In November 2024, Solana collected $343.96 million in protocol fees compared to Ethereum’s $178.65 million.

The dominance extends to transaction volumes, where Solana reached $77.51 billion compared to Ethereum’s $38.81 billion for November.

Implications for Both Blockchains

While Ethereum benefits from its first-mover advantage and institutional trust, Solana's cost-efficiency, scalability, and rapid growth position it as a formidable challenger.

Developers are increasingly deploying projects on Solana, drawn by its lower fees and faster transaction speeds. The adoption across various sectors, including new stablecoin launches like sUSD backed by low-risk assets such as U.S. Treasury bills diversifies Solana’s ecosystem.