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Solana’s (SOL) decentralized finance (DeFi) activity has seen a significant boost, with the decentralized exchanges (DEX) surpassing Ethereum (ETH) DEX in monthly trading volume. So far in November, Solana-based DEXes have recorded a trading volume of over $100 billion, marking a major milestone for the ecosystem.
The Solana DeFi ecosystem is gaining momentum and surpassing Ethereum DeFi
Solana, the fourth largest cryptocurrency with a reported market cap of $118.34 billion, has been on a record-breaking price trajectory. Recently, the digital asset hit a new all-time high (ATH) of $263 after hitting a low of $8 at the height of the FTX fiasco.
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Now, the layer 1 blockchain has reached another milestone as Solana-based DEXes surpassed $100 billion in monthly trading volume for the first time. According to facts of DefiLlama, Solana DEXes’ recorded 30-day cumulative trading volume is $116.51 billion.
By comparison, Ethereum mainnet-based DEXes saw trading volume of $61.61 billion during the same period. This means that Solana’s DEX trading volume was more than double that of Ethereum.
On a monthly basis (MoM), Solana’s DEX volume increased by more than 100% compared to October, which reached $52.5 billion. Meanwhile, the total value (TVL) in Solana’s DeFi ecosystem has increased to $9.30 billion, up from $6.23 billion a month ago.
The unprecedented increase in Solana-based DEX trading volume can be attributed to several factors. These include the ongoing memecoin frenzy, the blockchain’s low transaction fees, and an intuitive user interface.
It’s worth highlighting that Solana’s TVL has yet to surpass its ATH TVL of $10.02 billion, which was recorded almost three years ago in November 2021. In January 2023, the blockchain’s TVL hit a low of $210 million, dragged along by the broader crypto bear. market exacerbated by the demise of the FTX exchange.
At the time of writing, $3.58 billion of Solana’s TVL is tied to liquid staking protocol Jito, while Jupiter DEX holds $2.4 billion. Another prominent DEX from Solana, Raydium, accounts for $2.37 billion in TVL.
Where is SOL going?
Solana’s growing user adoption has played a crucial role in driving the recovery of its native token, SOL. Year-over-year (YTD), SOL is up over 157%, from $101 on January 1 to $263 on November 23.
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Despite such extraordinary returns, crypto experts remain optimistic about SOL and expect further gains for the digital asset. According to a recent analysis by Crypto’s Titan, SOL could reach $400 as it looks to break from a long-standing cup-and-handle pattern.
Additional bullish factors, such as the decreasing Bitcoin (BTC) dominance and the increasing probability of a Solana exchange-traded fund (ETF), could further propel SOL to new highs. SOL is trading at $248.31 at the time of writing, up 0.5% in the last 24 hours.
Featured image from Unsplash, charts from DefiLlama.com and Tradingview.com