The Solana blockchain, the undisputed leader of this start of the bullrun?

The unstoppable rise of Solana

After having shone during the last bullish cycle, the cryptocurrency of the Solana blockchain, SOL, stumbled very seriously during the 2022 bear market. Its future was indeed more than uncertain following the crash of the now infamous exchange platform. of FTX cryptocurrencies.

However, investors who have continued to believe in the potential of this blockchain are very generously rewarded today. Like a phoenix rising from its ashes, SOL has once again risen among the most capitalized cryptos, occupying 4th place at the time of writing of the ranking.

At “only” $13 billion USDT market cap, Tether's stablecoin, it is entirely possible that Solana will claim a place on the podium of the most capitalized cryptos in the days/weeks to come.

SOL is currently trading around $240, a price approaching its all-time high (ATH) during the last bull cycle.

👉 Find our latest technical analysis on SOL, Solana’s cryptocurrency

Over the past 3 months, the Solana blockchain has managed to capture $1.2 billion in net flowswhich demonstrates strong investor interest in this ecosystem.

Net flows from different blockchains over the last 3 months

With nearly a billion dollars in net flows on Base, Coinbase's layer 2, during this same period, Solana enjoys a comfortable lead of more than $220 million.

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The success of Solana and its symbiosis with memecoins

Although it is now accepted that we are in a bullish cycle, which is generally conducive to the price appreciation of many cryptocurrencies, it should be recognized that SOL crypto stands out from the crowd.

Indeed, the Solana blockchain benefits from certain advantages which tip the scales in its favor. Featuring a more centralized and scalable architecture than that of Ethereum, the Solana blockchain can pride itself on offering low costs for carrying out transactions.

👉 How to buy SOL, Solana’s cryptocurrency?

Solana also offers a smooth user experienceideal for newcomers and modest portfolios in the world of cryptocurrencies. These characteristics, sprinkled with a strong and engaged community, have made Solana a preferred environment for the explosion of speculation around memecoins.

Although activity on the Solana blockchain is not simply limited to trading memecoins, the advent of the launcher Pump.fun, a memecoin launchpad, has likely been a catalyst for investor attention and retention this round.

Launched just a few months ago, the protocol has already garnered nearly $213 million in fees and launched over 3 million different tokens. In the last 24 hours alone, over 33,000 memecoins have been launched on Pump.fun at a breakneck pace.

Graph representing the number of tokens launched each day on Pump.fun

However, it should be kept in mind that most tokens launched on Pump.fun never reach sufficient market capitalization to access the next stage of the process: the decentralized exchange (DEX) Raydium.

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A DeFi setting new records

We told you about it a month ago, Solana is gaining ground against the Ethereum blockchain, particularly in terms of its decentralized finance (DeFi). Raydium, the main DEX of the Solana ecosystem, has particularly benefited from this by becoming the go-to place for trading memecoins.

The token underlying the protocol, RAY, is the only token that is not a memecoin to have made it into the top 5 performers for the month of October. Over the last 30 days, the price of the Raydium token has continued its rise by 167%.

Over the past 24 hours, nearly 6 billion dollars were traded on Solana ecosystem DEXs:

Trading volumes on DEXs of different blockchains

Raydium reached volumes exceeding those of Uniswap, usually the king of DEXs, over the last 24 hours and the last 7 days. By surpassing Uniswap by more than $6 billion in volume over the last 7 days, Raydium demonstrates strong investor interest in Solana.

The 5 largest DEXs in terms of volume

Orca, which is also a DEX on Solana, has also benefited from strong growth in terms of volumes over the last 7 days, increased to 136%.

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Volumes on Solana DEXs reached $40 billion in the last 7 daysa record to date:

Evolution of DEX volume on the Solana blockchain

To summarize, if we were to compare the excitement around memecoins to a gold rush, the DeFi protocols on Solana would be the shovels, and the adage “in a gold rush, sell shovels” would take everything here its meaning.

Although activity on Solana DEXs is not limited to trading memecoins, there is no denying that memecoins have given tremendous traction to the entire Solana ecosystem.

It will be interesting to observe whether Solana DEXs will manage to transform the trial by creating significant user retention, or if on the contrary these volumes are only temporary and solely linked to the thesis of a memecoin supercycle.

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Sources: DeFiLlama, Artemis Terminal

Passionate about the blockchain ecosystem, I like to deepen my knowledge and share my discoveries. In a perpetual quest to learn more about cryptos, I recently joined the Cryptoast Research team where I provide weekly fundamental analysis.

Theo Zananiri

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