Ethereum is no longer the crypto casino as DEX traffic switched to Solana

Some of the price weakness of Ethereum (ETH) may be due to the outflow of DEX activity. After the end of the NFT and Web3 season, Ethereum is no longer the crypto casino, as traffic shifted to Solana tokens. 

One of the reasons for the outflow of Ethereum (ETH) users and a depressed market price may be due to the fact that the network is no longer the main ‘crypto casino’. After the slowdown of NFT trading and the shift of memes to Solana, Ethereum saw an outflow of small-scale users, though remaining a chain for large-volume DeFi activity.

Uniswap remained the biggest market by volumes, but Raydium quickly took up around 30% of all DEX activity. The ratio of DEX to centralized trading is also at an all-time high, showing demand for highly speculative bets.

Ethereum token launches slow down

Ethereum lost some of its DEX shares to L2 chains, especially Arbitrum and Base. ETH led in terms of volumes, but not when it came to betting on new token launches. Ethereum carried between 10K and 15K new token launches per month in the last quarter of 2024. At that time, Base launches exceeded 250K tokens per month. 

All of that activity was still smaller than Solana’s Pump.fun launches, which exceeded 1.2M tokens per month. In January, Pump.fun extended the trend, creating over 1.71M new tokens. 

The lower and more accessible fees meant the cheaper chains could serve like casinos, where traders and bots allocated a few dollars to thousands of tokens, hoping one would break out. Betting on meme tokens requires minimal fees to be viable.

Solana still requires priority fees and bribes to make sure a transaction is approved. However, the chain does not go through the fee spikes of Ethereum, where a simple swap has cost hundreds of dollars during busy times. 

Solana expands token bets outside Pump.fun

Solana’s share of tokens launched outside Pump.fun is also increasing. The chain started carrying external project launches that do not go through the Pump.fun bonding curve. The infrastructure on Solana, with Raydium, Orca, and Meteora, allows for projects to build liquidity fast and gain more exposure for their token. 

In January, Solana benefitted from a wave of ‘official’ tokens, spearheaded by Official Trump (TRUMP) and Melania (MELANIA). Other token launches followed, showing a trend of moving away from Ethereum and picking Solana as the default chain. 

Solana carried more tokens from outside Pump.fun, with a steady trend for more transactions not related to the launch platform. In December and January, Solana DEX carried higher volumes for tokens outside of Pump.fun. 

Those external tokens are tied to meme cults, general launches, and even some utility assets. The tokens also came from the recent trend for tokenized AI agents, which launched on other platforms. 

Solana continues to tap small-scale traders, with the biggest cohorts carrying transactions under $100 and those trading amounts between $100 and $1,000. DEX activity allows for those relatively small traders to test multiple markets and liquidity pools without fees eating into their gains. 

Solana meme tokens delayed the altcoin market

Solana was among the chains with the biggest count of daily active addresses. In December and January, active wallets moved between 5M and 6M daily, while Ethereum still carried under 700K active daily wallets. 

The shift to new meme and AI agent launches also delayed the shift to an altcoin season. One of the expectations was for funds to flow back into Ethereum tokens, including DeFi assets. However, traders switched to holding SOL and trying to bet on the next token to make it big. 

As a result of the increased Solana activity, the chain retained higher economic activity, with up to $30M in daily fees from the protocol and the leading apps and exchanges. Solana itself produced $4.33M in fees, with just $1.57M for Ethereum. 

Solana traffic is still heavily subsidized with new SOL issuance. The current price of SOL just under $200 reflects the constant inflows. However, based on the increased DEX activity and fees produced by top apps, SOL is seen as undervalued and overdue for catching up with ETH.

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