Retail Users Are Ignoring Ether and Bitcoin to Prioritize Solana — Report

Solana topped the ranks in the first quarter of 2024, propelled by increased activities in Decentralized Exchange (DEX) and (DeFi). The platform’s increased scalability, minimal transaction costs, and solid technological framework were other catalysts of this surge.

According to the latest report, “State of Solana Q1 2024,” by blockchain analytics firm Messari, Solana’s DEX volume hit impressive numbers, aligning with the rising trading volume within the SOL ecosystem. Furthermore, this report shows that Solana’s average daily spot DEX volume soared by over 300% to $1.5 billion. Per Messari, “Solana has become the top choice for retail Users.”

Moreover, reports showed that Solana’s DeFi ecosystem printed high TVL digits, surpassing $5 billion in Q1. Its total value locked increased by 200%, solidifying its position as the fourth-largest network for decentralized finance projects. This growth mirrors investors’ interest in DeFi projects utilizing the Solana blockchain.

At the same time, Solana’s stablecoin market capitalization hit impressive numbers, rising by 50% to nearly $3 billion. This upswing is primarily attributed to USDC’s remarkable performance in the year’s first quarter. The ecosystem-leading stablecoin saw its market capitalization on Solana soar by 110%, slightly surpassing $2 billion.

The heightened adoption of stablecoin on the Solana blockchain reflects growing user confidence in fiat-pegged digital assets. This is because stablecoins offer price stability with appeals to market participants seeking to store their money using cryptocurrencies.

Solana-based projects also saw massive returns in Q1 2024, amassing $89.2 million in funding, exceeding the total raised throughout 2023 by $2.5 million. This surge showcases a significant increase in investment activity within the Solana ecosystem.

Another impressive milestone was Solana’s introduction of token extensions, enabling various configurable features for token issuers. Several projects have embraced this innovative idea, including stablecoin issuers like Paxos and GMO Trust and crypto-native projects like Photo Finish LIVE and Wen.

Furthermore, Solana unveiled the developer shop Anza and the growth organization Colosseum to improve decentralization and expand its ecosystem. While the surge in trading volume is promising, concerns arise due to the significant contribution of meme coins. 

Meme coins, dominant assets on Solana’s DEX, display highly volatile price movements and lack inherent utility. Hence, this prevalence may signify a speculative bubble rather than sustainable growth rooted in robust projects. Solana trades at $157 at press time, reflecting a 1.66% intraday increase.