CandleFocus

Solana dominated with dramatic fee growth in October

Author: Content Editor
Solana has seen significant growth in its influence as a fee-generating chain, surpassing Bitcoin in monthly fees. Although still behind Ethereum, Solana's success can be attributed to the launch and trading of meme tokens. In October, Solana's share of fee-generating networks reached a record high, with apps like Raydium, Jupiter DEX, and Pump.fun attracting the majority of the chain's traffic. Solana's impressive performance has allowed it to surpass Bitcoin in terms of fees, primarily due to holding and lower on-chain activity. Raydium and Jito are also among the biggest fee producers on the Solana network. In terms of DeFi, Solana has seen significant growth in liquidity and users, and it will soon carry cbBTC, a wrapped BTC version, launching on November 7. On the other hand, Ethereum's fees have decreased from its record levels due to the Dencun upgrade and a shift to L2 transactions. Solana, however, has its limitations, particularly with meme token and Raydium trades, which test its capacity and create an economy of bribes and priority fees. Despite operating at a loss, Solana's fees still serve as a proxy metric for its economy and tokenization trends. The current price of SOL has shown responsiveness to Bitcoin's rise, reaching above $192 and trading at a premium against the US dollar. Open interest on SOL futures has reached an all-time high, indicating a highly active season for the asset. While there are expectations of a breakout for SOL and a move to a new price range as high as $500, the asset may also face potential sell-offs from whales or fee recipients due to its vulnerability in the market. Nonetheless, in the short term, SOL is expected to attempt a rally above $250, with the potential for reaching $1,000 in a more extended bull market.

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