Between March 3 and March 6, the DEX trading volume on Solana exceeded $2 billion for four days. According to DeFiLlama, the trading volume reached almost $3 billion on March 5, setting a new single-day high. With nearly 7% over the past 24 hours, the surge is the highest since early March 2022. It is no surprise that the network’s DeFi ecosystem has grown 13 times since the FTX collapse.
However, the rise in activity of on-chain transactions may be one of the reasons for the current congestion on the Solana network. A few days ago, Binance halted Solana withdrawals because of a significantly increased volume of transactions. Despite network congestion, SOL consistently hits new highs at $140, showcasing its strength and growth in the crypto market.
Buoyed by the bullish market momentum, Solana has recaptured investors’ sentiment, steering attention away from Bitcoin and Ethereum. SOL broke new records as the token approached a 2-year high. From less than $10 a year ago, the leading altcoin exceeded $130, a whopping 500% surge.
Gas Fee On Solana Surge
Similarly, the trading volume of the 5th largest crypto asset has spiked 120% to $3.2 million. Market experts have drawn parallels between SOL’s price trajectory and that of Ethereum in 2020. If the rest of the cycle plays out similarly, a takeoff is imminent. A market observer wrote:
SOL still really reminds me of ETH in 2020. Pretty sure the rest of the cycle plays out similarly too, expecting takeoff soon. Bring it on.
While price is one way to look at it, the other aspect is revenue, as measured by the gas fees of the respective blockchains. And Solana’s gas fees have been soaring, both in absolute terms and as a percentage of Ethereum’s gas fees. In February 2023, Solana’s daily gas fees were less than 0.2% of Ethtereum’s. In January 2024, the table flipped as Solana’s daily gas fees exceeded 8% of Ethereum’s, making a nearly 40-fold increase.