As of early September, decentralized finance (DeFi) activity shows signs of decline. According to DeFiLlama, a prominent data aggregator, all DeFi protocols dispersed across significant blockchains like Ethereum and Solana manage assets worth approximately $77 billion. Notably, Ethereum continues to dominate in total value locked (TVL), maintaining its stronghold in the DeFi sector.
Raydium Dominates Solana DeFi Scene
Despite the overall downtrend in DeFi activity, Solana’s DeFi ecosystem is experiencing a surge. Raydium, a leading decentralized exchange (DEX) on Solana, has cemented its status as a top DeFi protocol on the platform. Recent data from Artemis, shared by an analyst on X, reveals that Raydium commands a 60% market share on Solana, attracting over 200,000 active users on average. This impressive engagement places Raydium ahead of other Solana-based protocols, including Jupiter.
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The increase in user activity on Raydium has significantly contributed to the rise in daily active addresses on Solana. Current data indicates that Solana boasts an average of 5.5 million daily active users, marking an all-time high. This remarkable growth contrasts with Ethereum and its layer-2 ecosystem, where user activity remains less robust.
Solana’s scalability on the base layer, unlike Ethereum’s reliance on scaling solutions such as Base and Arbitrum, results in high throughput and increased confidence. Solana’s architecture eliminates the need for off-chain systems like fault-proof systems or sequencers, which often introduce vulnerabilities and centralization risks.
Gas Fees Rapidly Falling, Meme Coin Activity Shifts To Tron
Interestingly, even as daily active addresses on Solana rise, gas fees have been plummeting. As of September 7, revenue generated from gas fees hit its lowest level in six months, hovering around $414,000. Although there was a temporary recovery in revenue, it pales in comparison to the $5 million generated on March 18, based on TokenTerminal data.
The significant drop in gas fees can be attributed to the waning popularity of Pump.fun, a meme coin launchpad on Solana. In recent weeks, gas fees from Pump.fun have declined by over 80% after reaching a peak of $2.31 million in late July. By September 7, Pump.fun generated approximately $319,000 in fees, as per DeFiLlama.
Meme coin activity appears to be shifting to Tron, another scalable blockchain. The launch of SunPump, a meme coin launchpad on Tron in August, coincided with the decline in Pump.fun activity. Consequently, daily fees on Solana have been affected.
As DeFi continues to evolve, the dynamics between different blockchains and their respective protocols will undoubtedly shape the future landscape of decentralized finance. Staying informed about these trends is crucial for investors, developers, and enthusiasts alike.
