The Revival of Solana in 2024

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Today, we are looking into the surging onchain activity of the Solana network, resulting in the highest number of new addresses and network fees in recent times.

Solana is known for its speed, efficiency, and low-cost transactions. This year, its token price, network activity, and user engagement have experienced a major surge. The total value locked in the protocol has increased from $1.4 billion at the beginning of the year to $4 billion today.

The growing popularity of Solana's native memecoins, such as Dogwifhat (WIF), Bonk (BONK), and Book of Meme (BOME), has been a major catalyst for its growth. These coins have generated over 1000% returns, resulting in tens of millions of new addresses on the network each month. In fact, March saw a record high of 28.89 million new addresses.

The substantial increase in new user activity on the Solana platform shows rising interest and adoption. This surge in activity, particularly on decentralised exchanges (DEXes) like Jupiter and Raydium, has led to significant growth in network fees. In fact, daily fees on the network reached an all-time high of $5.08 million on March 18th, averaging more than $1 per day for most of this year.

Solana’s resilience and survival after the crypto winter can be attributed to a vibrant developer community and thriving DeFi and NFT ecosystems. Solana’s architecture has also made it popular among memecoins and decentralised physical infrastructure network developers. Thus, it has seen a growing volume of new tokens, outpacing other chains such as Binance Smart Chain, Ethereum and Polygon.

Another important narrative that has contributed to Solana's explosive growth is the emergence of new DeFi primitives, focusing on creating and utilising DeFi-native stablecoins. This is on the back of well-established DeFi 1.0 protocols such as Marinade (liquid staking), Phoenix (perpetual swaps), Jito (MEV capture), and MarginFi (leveraged trading). Eliminating the dependence on centralised DeFi-native stablecoins creates a strong decentralisation environment. They can be meticulously tailored to address specific use cases within the ecosystem.

The rise of Solana in 2024 has implications for the broader crypto ecosystem. As a competitor to Ethereum and other layer 1 protocols, Solana’s success could encourage further innovation and competition in the blockchain space. Its high-performance architecture and growing ecosystem could also attract more users and developers to the platform, potentially leading to increased adoption and value appreciation.

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