Key Points
Solana’s decentralized exchange (DEX) trading volume soared to $120.6 billion on January 21, marking a 323.3% increase over the past seven days. This has led to speculation about Solana’s potential to rival Ethereum and establish itself as the leading Layer 1 blockchain by 2025.
DeFiLlama data shows that Ethereum’s weekly DEX trading volume increased to $24.7 billion, a 47.58% rise. This surge was primarily fueled by Uniswap, which contributed over 73.7% of the trading volume and added $17.46 billion to Ethereum’s DEX activity.
Solana’s Rising DEX Activity
In contrast, Solana’s top DEX, Raydium, experienced a 236% weekly change, contributing $52 billion to Solana’s trading volume last week. Following Raydium, Meteora significantly boosted Layer 1’s weekly volume with a 13,379% increase. According to Knox Ridley, an analyst at I/O Fund, Solana appears set to make gains on Ethereum in terms of DEX activity due to increasing attention from DEX traders.
Ridley suggests that Solana’s unique “proof of history” protocol could position it as a market leader. This protocol allows for a high throughput of 65,000 transactions per second without requiring second layers, making it faster and more efficient than Ethereum’s proof of stake protocol, which has a maximum recorded TPS of 62.34 according to Chainspect.
Solana’s new update, Firedancer, developed by Jump Crypto, aims to enhance development on the Layer 1 by increasing scalability and improving the network’s resilience against bugs and attacks. Ridley believes that these technical advancements could enable Solana to serve as a more scalable and secure Layer 1 Blockchain, posing a significant challenge to Ethereum, especially in applications where speed and efficiency are crucial.
Another factor contributing to Solana’s growing popularity is its stablecoin infrastructure. Despite Ethereum still leading in terms of stablecoins, Solana is on the rise with a 67.48% increase in its stablecoin market cap, which stood at $9.8 billion as of January 21, 2025.
Interestingly, Solana’s 13.13% volume-to-market cap ratio, as reported by CoinMarketCap, suggests a surge in trading activity compared to Ethereum’s 10% ratio. This activity underpins Solana’s growth, with DEXes like Raydium and Meteora driving high liquidity. In contrast, Ethereum’s lower ratio indicates slower growth.
Analysts at Bitwise Europe also believe that the price of SOL could increase by 3,000% by 2030 due to what they term the ‘iPhone moment’, making the blockchain more likely to surpass Ethereum in 2025.
