Ethereum’s 41% fall – Is Solana the reason behind it?
- Trading volumes for top Ethereum-based coins ebbed substantially.
- Ethereum’s weekly DEX volumes plunged 25%.
Ethereum [ETH] witnessed a sharp fall in fee revenue this week, suggesting decreased network traffic and user participation.
Ethereum’s meme coin activity slows down
According to on-chain analytics firm IntoTheBlock, Ethereum validators collected a total of $116 million in fees over the week, representing a significant drop of 41.2%.
The slump came amidst decreasing meme coin trading on the network, a space which Ethereum has historically dominated.
Trading volumes for top Ethereum-based coins such as Pepe [PEPE], Shiba Inu [SHIB], and Floki Inu [FLOKI] ebbed substantially over the week.
This happened post a frenzied demand in the first half of the month, as per AMBCrypto’s analysis of Santiment’s data.
Source: Santiment
The fading meme coin mania was also reflected in the drop in trading volume of Ethereum-based decentralized exchanges (DEXs) — platforms frequently used by crypto degens to swap tokens.
According to AMBCrypto’s analysis of DeFiLlama’s data, volumes of just over $15 billion were facilitated on Ethereum DEXes in the week, marking a 25% drop from the week prior.
Source: DeFiLlama
Ethereum’s loss is Solana’s gain
The decline occurred as investors turned to the Solana [SOL] blockchain to satiate their meme coin appetite. Solana’s total DEX volumes rose 3% over the week.
An avalanche of new meme coins created on the network over the week, brought in more users, and consequently more revenue.
Solana offered a faster and cheaper alternative for degens to flip coins in comparison to Ethereum.
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The average transaction fee paid by Solana’s users in the last 24 hours was $0.027, as per SOL’s market value at press time. On the other hand, Ethereum charged $1.19 on average to validate a transaction.
The reduced on-chain traffic meant that fewer native ETH tokens moved, in turn implying lower demand. This partly contributed to a decline of 5% in its value over the week, according to CoinMarketCap.
