From DEXs to NFTs: Charting Solana’s trailblazing year in DeFi

Solana has emerged as a formidable force in the DeFi ecosystem. Its high throughput, low fees, and scalability have catapulted it to the forefront of the fastest-growing DeFi platforms, underpinning a wide array of applications and protocols. From lending and borrowing protocols to decentralized exchanges, monetization protocols, and NFT marketplaces, Solana’s infrastructure today supports an expansive ecosystem that spans the full spectrum of DeFi utilities.

Its growth trajectory over the past year has been nothing short of remarkable, especially given the fact that it saw its native token lose over 90% of its value in 2022. A surge in the number of projects launched, coupled with substantial increases in transaction volumes and a rapidly growing user base, has further cemented its position as a DeFi leader. Over the past few weeks alone, its stablecoin supply saw a meteoric rise, surpassing $3 billion, and it established new all-time highs against Ethereum in DEX trading activity.

This led to extensive media coverage of Solana. This coverage has mainly focused on the rapid rise in memecoins on the platform and the subsequent rug pulls, controversies, and broader network and regulatory issues that ensued. However, none of this coverage usually focused on the granular, foundational aspects of the Solana ecosystem.

In this report, CryptoSlate dives deep into the Solana ecosystem, spanning from emerging programs to the stalwarts of the DEX space, to compile a broad spectrum of Solana metrics into a single report. This report aims to provide readers, from causal enthusiasts to seasoned investors, with an in-depth overview of Solana’s current state.

Solana’s decentralized exchanges have handled over $254 billion in trading volume so far. As of Apr. 5, $1.312 billion in liquidity is locked across Solana DEXs. The network has attracted over 6.9 million traders and facilitated over 942 million swaps.

The network peaked in volume and liquidity in the second half of March. The highest volume was handled on March 18, when $26.7 billion worth of tokens were traded on Solana’s decentralized exchanges.

Raydium accounts for the majority of Solana’s DEX volume. The decentralized exchange saw a massive spike in popularity this year, dethroning Orca as the largest DEX in terms of volume. As of April, 43.7% of all the DEX volume on Solana comes from Raydium. Orca ranks second with 26.5%, followed by Meteora with 11.7% of the volume.

Liquidity peaked on Mar. 31 at $1.3 billion, a sharp increase from the $560 million in liquidity on DEXs recorded at the beginning of March.

Just like with volume, Raydium reigns supreme when it comes to liquidity. As of April, over 60% of the total value locked in Solana DEXs is on Raydium. Orca, which accounted for almost half of the DEX liquidity at the beginning of the year, now accounts for only 20.3%, with Meteora trailing behind with 16.6%.

Zooming further into individual exchanges and their volumes shows just how much of the market share Raydium has. Aside from the impressive $1.14 billion in 24-hour trading volume it saw on Apr. 4, Raydium has handled a total of $118.21 billion in volume since its inception — half of the total DEX trading volume recorded on Solana.

Apps are user-facing platforms and services that utilize the Solana blockchain and its protocols to offer specific functionalities to its users. They’re built on top of protocols, leveraging the underlying rules and standards to create services.

A new wave of user apps has begun development this year. As of Apr. 5, there are 64,952 app users on Solana, and the apps collectively have a market cap of just over $114.8 million.

The number of app users escalated rapidly in March, growing from just over 3,200 at the beginning of the month to 65,000 on Mar. 31. The total number of Solana app token holders has decreased slightly since it still shows significant growth from the sector.

Diving deeper into the market cap of these tokens shows that SolChat leads with over $59.8 million in market capitalization. This represents a significant decrease from the $154.7 million market cap it reached on Mar. 17. However, a granular view of the market cap composition shows more competition popping up throughout the month, with SolMail and SolCard accounting for a higher and higher market cap percentage.

As of Apr. 5, SolChat remains the most popular Solana app. Data from Dune showed 24,939 SolChat users, with SolMail ranking second with a significantly lower number of token holders — 13,574.

When it comes to market cap, SolChat continues to lead with $58.5 million, while SolMail recorded $20.5 million. SolCard, the third-highest-ranking app, had a market cap of $10.4 million at press time.

While the NFT mania began on Ethereum back in 2022, Solana was quick to take over a significant part of that market. So far, over $1.79 billion worth of NFTs have been traded on various NFT marketplaces on the Solana blockchain. The blockchain processed over $23 million in platform fees from NFT trading and paid $39 million in royalties to NFT creators and artists.

Data from Dune Analytics showed that 1.337 million users traded NFTs, with the platform processing 23.79 million NFT trades.

Two marketplaces dominate the NFT space on Solana: Tenorswap and Magic Eden. As of Apr. 5, Magic Eden accounts for 66.8% of the total NFT trading volume on Solana. However, Magic Eden’s dominance over NFT volumes came only at the end of February, as Tenorswap has accounted for most of the NFT volume since late October 2023.

Tenor’s dominance over the market in March and April this year is due to the sharp influx of new traders to the platform. Tenorswap’s user base increased from 39,000 on Mar. 11 to over 151,000 on Apr. 5, while Magic Eden has seen a consistent drop in users since December last year.

To better understand how much NFT volumes on Solana increased this year, we have to compare it to other blockchains hosting large NFT markets. Ethereum’s popularity among NFT traders has been decreasing rapidly since last January. As of Apr. 1, there are 193,996 NFT traders on the Solana blockchain, compared to only 27,331 on Ethereum.

However, the significantly smaller number of NFT traders on Ethereum created a much higher trading volume, with the platform handling $97.7 million in NFT trading volume on Apr. 1. Solana, with its 193,996 traders, handled $54.1 million in volume.

Despite the significant depreciation in its native SOL’s value, Solana demonstrated a remarkable capacity for growth, both in the breadth of its ecosystem and the depth of its user engagement. The surge in project launches, exponential increases in transaction volumes, and a burgeoning user base have solidified Solana’s standing as a force to be reckoned with in the DeFi sector.

The focal point of CryptoSlate’s report has been Solana’s DEXs, which have collectively handled over $254 billion in trading volume. This, paired with the platform’s ability to attract nearly 7 million traders and facilitate almost a billion swaps, shows just how liquid and active Solana’s market is. Raydium’s dominance in volume and liquidity shows how competitive the DEX market on Solana is, offering insights into what users prefer and where the market sentiment is pointing.

Moreover, the emergence and rapid growth of user apps show Solana’s utility and appeal are diversifying. The significant increase in app users and their growing market cap point to a deepening engagement with Solana’s infrastructure. The analysis of NFT marketplaces and trading activity on Solana offers another dimension of growth, showcasing Solana’s expanding footprint in the NFT space and its competition with other blockchains.

This report aimed to explore the multifaceted dimensions of Solana’s ecosystem, from its DEX platforms and application layer to its competitive stance in the NFT marketplace. Despite facing challenges typical of rapidly growing networks, including scalability concerns, network stability issues, and decreased throughput, Solana’s ecosystem continues to evolve.

While most of this growth is fueled by bullish market sentiment and a race to cash in on the growing DeFi sector, a large part of it still comes from the platform’s commitment to advance its technology and better serve its users.