$300m of other tokens bridged to Solana in the last week, why?

Over the last week, a significant amount of cryptocurrency movement involved tokens from various blockchains being bridged to Solana, including over $200 million worth of Ethereum.

This included assets from Ethereum (ETH), BNB Chain (BNB), and others, as evidenced by posts on X and web data indicating a total of over $300 million, according to data from deBridge Finance.

Based on total-value-locked, bridge tokens allow for the act of locking an original token on a native blockchain, then minting or unlocking an equivalent token on Solana (SOL). Often termed as “wrapped” tokens, e.g., wETH for Ethereum on Solana, bridging allows for interoperability between different blockchains.

One reason for the increased activity maybe diversification, alternative strategies and/or applications not being confined to one blockchain’s limitations.

In the case of the recent influx of tokens into Solana, this could include some recent speed updates that raise block limits, the advent of 120 millisecond blocktimes, as well as some feature upgrades that make the blockchain appealing to investors.

Other than speed and efficiency, lower transaction fees on Solana compared to Ethereum may be driving the surge. In addition, investors may be attracted to Solana’s DeFi staking and yield ecosystem, which offers more attractive returns compared to similar opportunities on Ethereum.

In contrast to Ethereum, Solana utilizes a combination of Proof of Stake and Proof of History, allowing for high transaction throughout.

Staking on Solana can yield about 7% APR, higher than Ethereum due to its inflation rate and lower total staked supply. Moreover, Solana’s native staking is less liquid than Ethereum’s post-Shanghai, but liquid staking protocols like Marinade Finance or Jito provide liquidity through tokens like mSOL or JitoSOL.

In sum, while Solana’s significantly lower fees make yield farming more viable for smaller investors compared to Ethereum, where high gas fees can eat into profits, other investors may lean more towards Ethereum based on volatility and it’s battle tested protocols, as well as Ethereum’s more established smart contracts and dApps.