Recent on-chain data indicates a significant 400% surge in trading volume on decentralized exchanges (DEXs) powered by the Solana network over the past week. However, a deeper look reveals that this spike may not necessarily correlate with actual user engagement. The primary driver behind this surge is the recent popularity of memecoins traded on Pump Fun, a platform thriving on the Solana network.
What’s Behind the Solana Surge?
Pump Fun, a memecoin creation platform, has garnered substantial interest lately due to its feature allowing users to launch memecoin projects for free. The platform’s popularity surged towards the end of June and has since dominated Solana DEX activities. Data from Dune Analytics shows that transactions involving Pump Fun have consistently led other activities on these exchanges since August. Access NEWSLINKER to get the latest technology news.
On August 18, for instance, transactions related to Pump Fun constituted 70% of all activities on Solana DEXs, leaving a mere 30% for other trades. This overwhelming presence signifies the platform’s crucial role in shaping the trading landscape within Solana’s decentralized finance (DeFi) ecosystem.
What’s the User Activity?
Despite the rise in DEX trading volumes, user activity in the Solana ecosystem has not seen a similar increase. In fact, the number of daily active addresses on Solana fell by 20% last week. Alongside this decline, the network’s daily transaction count dropped by 6%, as shown by Artemis data. A decrease in user activity and transactions typically results in lower fees and revenue. During the examined period, Solana’s transaction fees and network revenue decreased by 34%.
Key Inferences
– Solana DEX trading volume saw a 400% increase last week.
– User activity on the Solana network dropped by 20%.
– Solana’s transaction fees and network revenue fell by 34%.
– Pump Fun transactions accounted for 70% of activities on Solana DEXs as of August 18.
At present, Solana is trading at $147.3, with technical indicators suggesting a potential price rise. The MACD line is positioned to cross above the signal line, often signaling a transition from a bearish to a bullish trend. If this shift occurs and demand increases, Solana’s price could reach $148.27. Conversely, if buying pressure reduces and bearish momentum continues, the price could drop to $133.64.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
Source: https://en.bitcoinhaber.net/solana-dex-volume-increases-by-400