Decentralized finance (DeFi) activity could decline starting in early September. According to DeFiLlama, all DeFi protocols are spread across major blockchains like Ethereum and Solana manage approximately $77 billion in assets. Ethereum dominates in terms of total value locked (TVL).
Raydium Dominates Solana’s DeFi Scene
While this may be the case, Solana’s DeFi scene is booming if recent data is anything to go by. Raydium, a leading decentralized exchange (DEX) on Solana, has cemented its position as a leading DeFi protocol on the platform.
According to Artemis data common According to an analyst at X, the DEX holds 60% of the market share, attracting an average of over 200,000 active users. At this rate, Raydium is the most engaged DeFi protocol ahead of Jupiter.
The increase in user activity has also led to an explosion in the daily active address base. The latest data shows The modern blockchain has an average of 5.5 million daily active users, the highest level in history. At this rate, despite the rise of Ethereum and its layer-2 ecosystem, their protocols are not as active as those deployed on Solana.
Solana is scalable on the base layer, unlike Ethereum scaling solutions like Base and Arbitrum. The result is high throughput and greater trust since there are no tools like a failover system or sequencer. These off-chain systems tend to introduce weaknesses and lead to centralization.
Gas Fees Drop Rapidly, Coin Activity Shifts to Tron
Interestingly, even as the number of daily active addresses increases, gas fees drop. As of September 7, revenue from gas fees was at a six-month low of around $414,000.
Although revenue has temporarily recovered, it is nothing compared to the $5 million generated on March 18, looking at TokenTerminal data.
The drop in fees could be related to the declining popularity of Pump.fun, a meme coin launchpad on Solana. In recent weeks, the launchpad’s gas fees have been decreasing, dropping more than 80% after peaking at over $2.31 million in late July. On September 7, Pump.fun generated around $319,000 in fees, looking DefiLlama.
Meme coin activity, judging by strong data from DeFiLlama, appears to be shifting to Tron, another scalable blockchain. The launch of a meme coin launchpad, SunPump, in August coincided with the decline of Pump.fun activity, and thus, there are daily fees for Solana.
Main image from Adobe Stock, chart from TradingView
