The Solana blockchain network recently hit an all-time high for daily revenue, reaching $8.7 million on 23 October, according to Blockworks Research.
This new record reflected a continued upward trend from the previous day when Solana generated just under $8 million. The numbers represent the total revenue from several fee types across the network, including base fees, priority fees, and user tips.
Much of this growth is credited to the expanding range of applications on Solana, especially in decentralised finance (DeFi) and non-fungible tokens (NFTs).
As more people and developers are drawn to these sectors, the blockchain’s activity levels have boosted its economic value.
“This milestone highlights the strength and resilience of Solana’s ecosystem”, a representative from Blockworks Research said.
Solana vs. Ethereum
In 2023, Solana has grown significantly, surpassing Ethereum in a few important areas. One example is Solana’s native cryptocurrency, $SOL, which has increased in value by an impressive 600% compared to Ethereum ($ETH) this year.
This growth has positioned Solana as a strong competitor in areas like smart contracts and DeFi, where Ethereum has traditionally held a dominant position.
Total value locked (TVL), a measure of assets held in DeFi applications on a blockchain, has also risen sharply on Solana.
Data from DeFiLlama shows that TVL on Solana jumped from under $250 million at the beginning of the year to more than $6.8 billion by 24 October.
This rapid increase is primarily due to the growing popularity of DeFi applications, NFT marketplaces, and other decentralised projects running on the Solana network.
Solana achieved another milestone earlier in July by surpassing Ethereum in weekly total fees for the first time, generating around $25 million in revenue over seven days, compared to Ethereum’s $21 million.
Industry analysts pointed to Ethereum’s Dencun upgrade in March, which reduced transaction fees by roughly 95%, as one reason for this shift.
Although Ethereum’s fee reduction has made it more accessible to users, it also reduced the network’s overall revenue.
Solana, on the other hand, has maintained stable network fees and continues to draw developers and users due to its fast, low-cost transactions. “With lower fees and faster speeds, Solana is seeing new developers and users flock to the platform”, said one industry expert.
What’s fuelling Solana’s activity?
The rise in Solana’s activity isn’t solely driven by DeFi and NFTs. Recent interest in gaming and meme coins has also significantly contributed to its surge.
One major development is that the game developer Studio369 announced it would be moving its mech shooter game, MetalCore, to Solana.
This decision highlighted Solana’s appeal to the gaming industry, where fast and cost-effective transactions are essential.
In addition, meme coin trading platforms on Solana, such as Pump.fun and Moonshot, have boosted network activity as traders engage with these coins.
This trading enthusiasm has led to increased revenue from priority fees and tips as users try to confirm transactions quickly during high-traffic times.
Solana’s decentralised exchanges (DEXs) are also contributing to its growth. On 21 October, Raydium, a popular Solana-based DEX, outpaced Ethereum in 24-hour fee revenue, generating $3.4 million compared to Ethereum’s $3.35 million.
As DEXs become more popular, they play a key role in increasing transaction volumes and revenue on Solana’s network.
As Solana continues to grow, it is now being considered a potential candidate for inclusion in cryptocurrency-based exchange-traded funds (ETFs) in the US.
Since Bitcoin and Ethereum are already in discussions for ETFs, many industry insiders believe Solana’s $SOL token could be the next to be included.
This would bring more visibility and legitimacy to Solana in traditional financial markets, likely attracting additional interest from institutional investors.
While Solana’s recent achievements have shown its growing impact in the blockchain world, the network also faces certain challenges as it continues to expand.
Solana’s high transaction speeds and low fees have been vital to its success, but they may also lead to network congestion and centralisation concerns if user demand grows too quickly.
To sustain its momentum and reputation, Solana will need to carefully balance scalability, decentralisation, and security as it moves forward.
