DEX activity on Solana is catching up with Ethereum

Solana’s meme token boom continues to shift the balance, with DEX activity catching up with Ethereum. It has reached around 57% of the activity levels on the Ethereum blockchain. However, Ethereum maintains an advantage in terms of higher liquidity and wider adoption through Uniswap.  

Solana’s DEX activity has seen gradual growth throughout 2024, catching up with Ethereum’s levels. The last quarter saw a new meme token boom with corresponding inflows into Raydium, with DEX volumes now at 57% of the levels on Ethereum. 

The biggest story on Solana is the capacity of Raydium, which now competes with Uniswap and its presence on 23 chains. Raydium is a single-chain DEX that is fast becoming the top crypto app based on fee generation, volume, and usage.

Solana still has a smaller lending sector compared to Ethereum, but that is also on the rise, with the potential for Sky Ecosystem to move some of its assets.

According to DappRadar, Raydium is the top trending app as of November 21. Jupiter DEX is also climbing up the ranks just as Meteora is adding volume to the Solana ecosystem. 

Solana DEX trading looks cheaper than Ethereum, although traders may face hidden costs and obstacles due to the need to pay bribes to validators to receive favorable MEV block positioning to complete their swaps. 

Raydium catches up with Uniswap

Uniswap V3 on Ethereum still handles $1.8B in daily volumes. Raydium recently raised its activity to $4.5B in 24 hours, driven by the prevalence of multiple meme token trends. Raydium also sees much more active fluctuations in its top pairs, as the DEX reacts immediately to rollovers into new memes.

Raydium carries $2.2B in value locked after new inflows of SOL and a higher market price. The DEX is second only to Uniswap, which has a head start with $5.6B in value locked. 

Raydium’s fee peaked for a day on November 20, generating above $15M in daily fees. It returned to $12.47M one day later, behind Tether (USDT) even though it is still near peak activity. 

Is SOL undervalued?

After years of sideways movement during bear markets, SOL finally broke out to touch $230 levels again. The recent DEX activity and USDC inflows have raised the question of whether SOL is undervalued. 

SOL traded at $242.04, while Ethereum (ETH) retained its position above $3,100. Considering market capitalization as a whole, Solana’s tokens are valued at 33% of the entire ETH value. If the network growth, users and fees continue to catch up, this may suggest the entire ecosystem is undervalued in comparison with Ethereum. 

Solana is also in competition with Ethereum’s family of top L2 chains, which have emerged to scale the L1 network. However, DEX trading is a fluctuating metric, which means this is a temporary achievement. 

In other metrics, Solana lags in terms of stablecoin total supply, as well as total value locked. Some of the activity is tied to trading wrapped blue chip tokens, but the main focus is still on meme launches and early-stage risky trading. 

Solana bot activity moves ahead of Ethereum

Most of the memes on Ethereum are also bridged or re-launched to Solana. However, there are questions about the chain’s future value, sustainability, and ability to onboard more users. Ethereum still has around 500K daily active users, while Solana keeps marking new records, with upward of 6.02M daily active wallets.

Solana remains a bot-driven network, with an almost constant DEX bot war. This means even a small increase in DEX activity will boost the challenges between bots. Solana carries more than 82% of overall trading bot status, up from 47% in October. 

Bot activity on Solana has also moved ahead of Ethereum, while both chains were at almost equal levels in early October. However, Solana decisively flipped Ethereum in bot usage in the last two months, handling more than $438M in daily bot trades.

Bots are key to early sniping of new memes, as well as predetermined fast trades, front-running other users through bribes and priority fees to JitoSOL.

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