The recent launch of Meme coins like Goat, Pnut, and Act on Binance has ignited a new wave of excitement within the Solana ecosystem. According to Blockworks Research data, since October 19, 2024, Solana's daily on-chain fees have consistently surpassed those of Ethereum. On October 24, its revenue even exceeded ten million dollars. The fervor in the Meme sector continues to attract capital into the Solana ecosystem, making it one of the most vibrant spaces in the industry.
Undoubtedly, Solana has emerged as one of the most talked-about blockchains in this bull market. It gained early traction with over half of the standout projects in the DePin trend originating from its ecosystem, followed by successive waves of Meme mania.
So, where is the high yield in the current Solana ecosystem coming from? And how sustainable is this explosive growth?
Analyzing Solana's On-Chain Fees
Similar to Ethereum, Solana's on-chain revenue includes base transaction fees, MEV tips, and other charges. After Ethereum's EIP-1559 proposal, all base fees are burned, while MEV tips are directly rewarded to validators. Solana has a similar burning mechanism, where a fixed percentage of the base fee is burned (initially set at 50%), with the remainder distributed to validators.
Therefore, when comparing the on-chain revenue of Ethereum and Solana, all burned base transaction fees are included.
Specifically, Solana's on-chain revenue comprises base fees, priority fees, tips (such as those via Jito), and voting fees.
Looking at the trend of Solana's daily on-chain fees, the base transaction fees and voting fees have remained relatively stable compared to other components. However, priority fees and tips have experienced rapid growth since March this year.
What are these two types of fees? Priority fees are straightforward: users pay them to accelerate transaction speeds, usually added directly during a transaction. Tips (like Jito) are extra payments users make to validators, often for MEV-related transactions, directed as incentives.
The rapid growth of both indicates increased network activity and heightened DeFi actions leading to congestion. Users are more willing to pay priority fees to speed up transactions, while validators are seizing more MEV opportunities by optimizing transaction orders.
But what specific DeFi transactions are driving this on Solana? Is it entirely Meme-driven?
Data reveals that on-chain transactions on Solana primarily include Meme (via Pump.fun), other Meme trades, project tokens, LST tokens, stablecoins, and SOL transactions. Project tokens encompass all other categories, including DePin and SocialFi.
Over the past two months, the share of all Meme transactions has increased from 48% to 74%. The significant shrinkage in the proportion of other transactions does not necessarily mean a decrease in their volume. During the market uptrend, transactions involving project tokens, LSTs, stablecoins, and SOL on Solana have also grown substantially.
However, the growth of Meme transactions has been astounding, surging by 667% in the last two months. Compared to this, the share of other transactions has dwindled. This supports the earlier data: driven by the belief that "time is money" in Meme trading, users are naturally more inclined to pay priority fees. Increased on-chain activity also creates more MEV opportunities.
Active DApps on the Solana Network
Decentralized Exchanges (DEXs)
With Meme trading dominating, DEXs are naturally the most active DApps on Solana. Among the various DEXs in the ecosystem, Raydium currently holds the highest popularity. Data shows that, benefiting from the Meme explosion, Raydium—deeply integrated with Meme trading—now accounts for 63.5% of the total trading volume on Solana.
Orca, which initially held an absolute advantage in the Solana ecosystem, has seen its market share continuously eroded by the Meme trading surge, dropping from over 60% to about 15%. Pump.fun, as a Meme launchpad with built-in trading functionality, has also captured nearly 5% of the trading volume during this Meme boom, with a trend of gradual increase.
Aggregator DEXs and Trading Bots
Beyond direct DEX trading, aggregator DEXs and trading bots are highly active within the Solana ecosystem. Data categorized by transaction source shows that Jupiter accounts for 33% of the trading volume, while other protocols (including trading bots) contribute 19%.
Jupiter, the largest aggregator DEX on Solana, has seen its Total Value Locked (TVL) break records, reaching over $1.57 billion. Recently, Jupiter has been very active:
- On October 2, the proposal to "use 230 million unclaimed JUP tokens to extend and fund ASR" was approved, extending Active Stake Rewards (ASR) for another year.
- On October 8, it launched a mobile application supporting Apple Pay, credit cards, and other payment methods, seen as a new fiat on-ramp.
- On October 17, it introduced the Solana MemeCoin Terminal "Ape Pro," focusing on MEV protection to mitigate sandwich attacks in trading.
Amid these developments, the price of the JUP token has shown significant strength.
Besides aggregator platforms, trading bots are exceedingly active, contributing over 10% of transactions. The top four by revenue are Photon, Trojan, BONKbot, and Banana Gun. Photon's revenue over the past thirty days reached $29.85 million, making it the protocol with the highest revenue in the Solana ecosystem after the mainnet itself. Excluding the Solana mainnet and Pump protocol, three of the top five revenue-generating protocols in the ecosystem are trading bots, highlighting their profitability.
👉 Explore real-time trading tools
Other Notable DApps
Although DEXs, aggregators, and trading bots centered around Memes are extremely hot during this season, the soaring activity on Solana has also driven up the price of SOL. This, in turn, boosts protocols related to staking, restaking, lending, and leverage. Here are some of the currently popular DApps:
- Jito: Now the DApp with the highest TVL in the Solana ecosystem, exceeding $3 billion and accounting for over one-third of Solana's total TVL. Jito allows users to deposit Solana or Solana LST tokens for restaking. Its standout feature is the MEV suite, which extracts MEV revenue from transactions within the ecosystem and distributes it to stakers, thereby increasing their yields. Jito's restaking deposits have hit the hard cap of $25 million, indicating that Phase Two will raise the limit to meet more user demand.
- Kamino: A top-tier platform for stablecoin and LST asset yields on Solana, integrating lending, liquidity provision, and leverage functions. The protocol's TVL has reached $2 billion. Kamino offers one-click automated compounding concentrated liquidity strategies, allowing users to maximize returns by managing borrowed funds. Additionally, Lend V2 is expected to launch in Q4 2024, permitting permissionless creation of various lending markets to meet broader user needs and introducing automated single-asset lending vaults with cross-market liquidity aggregation, aiming to become Solana's financial base layer.
- Marinade: Another liquid staking protocol on Solana, currently with a TVL of $1.79 billion, ranking fifth just behind Raydium. However, as a liquid staking protocol, Marinade's revenue is much lower than Jito's. Recently, Marinade has been promoting Solana staking services for institutional investors, leading to a nearly 50% increase in TVL over the past month and a half.
Sustainability and Future Outlook
The Meme frenzy has undoubtedly fueled the vibrancy of the entire Solana ecosystem, most directly reflected in its on-chain revenue and user activity.
However, Memes are ultimately products of a specific period during a bull market. If the market turns bearish and the Meme trend fades, maintaining Solana's leading advantage as a blockchain will require careful strategy. Much like the once-booming NFT trend that left a mess after the feast, the question remains: Can Solana leverage the current Meme heat to build a healthier ecological revenue structure?
👉 Get advanced market strategies
Frequently Asked Questions
What are Solana's main sources of on-chain revenue?
Solana's on-chain revenue comes from base transaction fees, priority fees, tips (often for MEV), and voting fees. A portion of the base fees is burned, while the rest is distributed to validators.
Why have Solana's fees surpassed Ethereum's recently?
The surge is primarily driven by explosive growth in Meme coin trading, leading to network congestion. Users pay priority fees to speed up transactions, and increased activity creates more MEV opportunities, both boosting revenue.
How sustainable is Solana's current growth?
While Meme-driven activity provides short-term boosts, long-term sustainability depends on diversifying the ecosystem with robust DeFi, staking, and lending protocols beyond speculative trading.
What role do trading bots play on Solana?
Trading bots automate transactions, contributing significantly to volume and revenue. They help users execute trades faster and capture opportunities, especially in volatile Meme markets.
Which protocols are leading in TVL on Solana?
Jito leads with over $3 billion TVL, followed by Kamino and Marinade, which offer staking, lending, and leveraged yield strategies.
Could Solana eventually overtake Ethereum?
While Solana shows strengths in speed and low costs, Ethereum has a larger ecosystem and stronger decentralization. Solana's focus may complement rather than replace Ethereum's role in the blockchain space.