March 27, 2024
Solana Closes Gap with Ethereum: DEX Volume Booms
Latest Cryptocurrency News

Solana DeFi Surges: DEX Volume Skyrockets Amidst Token Airdrops

Solana’s upward price momentum coincides with increased activity in the network’s DeFi protocols. Data from Dune Analytics illustrates a tenfold growth in liquidity on Solana’s major decentralized exchanges since October 17. Moreover, December witnessed Solana’s DEX volume surpassing the previous monthly high from November nearly threefold, as revealed by DeFiLlama statistics. This surge aligns with substantial airdrops in Solana’s DeFi landscape, with another impending airdrop.

In 2021, Solana’s decentralized exchanges (DEXes) had relatively low volumes compared to Ethereum, DeFi’s primary platform. This gap widened after allegations of fraud against Solana backer Sam Bankman-Fried in late 2022. However, Solana’s DeFi ecosystem notably closed the distance with Ethereum in December. At times this month, Solana’s DEXes even outpaced Ethereum’s in volume.

Over the past week, Solana’s DEX volume surged by 26% to approximately $5.8 billion, slightly below Ethereum’s $8.5 billion volume, which remained consistent with the previous week, according to DeFiLlama.

This resurgence in DEX activity followed substantial token airdrops by Solana DeFi protocols Pyth and Jito. Pyth’s airdrop amounted to roughly $87 million in late November, while Jito distributed JTO tokens valued at around $228 million.

Airdrops, likened to stimulus checks for DeFi networks, faced challenges, particularly regarding Sybil abusers—individuals posing as multiple users to receive excessive tokens. Jito mitigated this by implementing anti-sybil measures in its final allocation.

Most of Solana’s recent DEX trading volume seemed to flow through the network’s Jupiter aggregator, aiming to optimize prices with minimal slippage. Notably, Jupiter announced plans to launch its token, with 40% earmarked for a community airdrop.

Airdrops have historically contributed to DeFi ecosystem growth, as seen with Ethereum’s DEX volumes increasing following a significant Uniswap airdrop in September 2020.

Interestingly, while DEX interest surged, Solana’s liquid staking experienced a slowdown, evident in a decline of over 2 million Solana stakes in the past week, according to a Dune Analytics dashboard. Jito also witnessed consecutive days of outflows, as reported by DeFiLlama.

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