Solana dApps Lead DeFi Surge as Raydium Outperforms Uniswap

The DeFi sector keeps changing at a rapid rate, and Solana now has that decentralized applications (dApps) that surpass almost any other blockchain’s dApps in terms of the number of monthly active users.

Among Solana’s dApps, the Raydium Protocol stands out, boasting an amount of active users that is 5.5 times greater than that of Uniswap—Solana’s largest decentralized exchange (DEX).

In parallel, the adoption of Solana has been so rapid that it has directed a lot of institutional interest toward it. The Cboe has taken the remarkable step of re-filing several 19b-4 applications with the SEC that are now four years overdue, all for an ETF that aims to hold spot market Solana. The asset managers behind these applications are large names in the fund industry—VanEck, Canary Capital, Bitwise, and 21Shares—and they seem quite motivated to push this product through.

Current figures on active users indicate that Solana’s dApps draw more engagement than those on Ethereum, BNB Chain, or any other network. With 30-day active user count of over 1.3 million, Solana is pulling way ahead of the DeFi pack.

Leading this surge is Raydium, a Solana-native DEX and automated market maker (AMM) that has outperformed Uniswap in user activity by 5.5x. This is a major shift in DeFi usage patterns; for so long, Uniswap was the go-to platform for decentralized trading.

There are several reasons for Raydium’s success:

– Swifter Dealings: Solana’s rapid transaction capacity means that you can swap tokens on Raydium with minimal waiting.

– Reduced Charges: In contrast to Ethereum’s frequently exorbitant gas fees, when one is trading on Raydium, one is paying far less.

– Deep Liquidity: Raydium’s integration with Solana’s larger DeFi ecosystem guarantees traders strong liquidity.

An increasing number of dApps based on the Solana network means that users are choosing efficiency and affordability more and more. And that could threaten Ethereum’s dominance in DeFi.

Interest within institutions for Solana is gathering steam too. In a recent filing with the SEC, the Cboe (Chicago Board Options Exchange) refiled 19b-4 applications for a spot Solana ETF on behalf of several major financial firms. These firms are:

– VanEck

– Canary Capital

– Bitwise

– 21Shares

Continuing attempts to push Solana into the realm of traditional finance have now resulted in the creation of an investment product that tracks the performance of Solana. This follows the path blazed by Bitcoin and Ethereum ETFs. Yet, as with those first-movers, there are hurdles to overcome and questions to answer before a Solana spot ETF can be offered in a manner that is above board (and without the appearance of a securities law violation).

Should this product gain approval, it could channel a considerable amount of institutional capital into the Solana ecosystem, which would bolster and reinforce its standing as one of the leading blockchain networks. The fact that these asset managers are re-filing implies that they remain optimistic about Solana’s long-term prospects and pay no mind to the regulatory uncertainty that surrounds them.

A key event shaping the Solana ecosystem is Pump.fun’s depositing of SOL into centralized exchanges. The project recently moved 90,000 SOL (valued at $20.5 million) to Kraken just four hours ago, adding to a series of large-scale transactions.

So far, Pump.fun has sent a mind-boggling 1,991,332 SOL (valued at $407 million) to Kraken, offloading 264,373 SOL for 41.64 million USDC. Even with those sales, though, the project has pulled in a total of 2.57 million SOL (worth an astonishing $588.6 million), making it potentially the single most profitable gig we’ve seen in the Solana space.

The several implications of these large transactions are as follows:

– Enhanced Liquidity: By transferring a large number of SOL tokens to Kraken, Pump.fun is giving a hand to traders that prefer to work in a less liquid environment but need liquidity now and then to execute orders without pushing the market around.

– Possible Price Pressure: The regular depositing and selling of SOL have raised some eyebrows and for good reason. If all these “investors” keep dumping their SOL, it might put significant downward pressure on the asset in the short term.

– Accumulation by Institutions?: Some analysts put forth the idea that these sales might be taken up by institutional buyers wishing to gain exposure to Solana before the time when they can invest in ETFs is upon us.

Recent events underscore Solana’s rising status in both DeFi and TradFi. Not only did Raydium vault past Uniswap in November to become the second most popular DeFi app running on Solana, but the dApps that Solana powers are also retaining a substantial number of users. Meanwhile, Solana’s native token appears to be establishing itself as a viable asset for potential ETFs.

Nevertheless, obstacles still exist. The frequent sell-offs of SOL by Pump.fun inject volatility into the situation, and getting past the hurdles of regulation might take some time and could slow things down. Still, assuming that the situation with Pump.fun gets managed, and given that Solana seems to be going right now, the DeFi direction in which it’s moving, and the backing it’s getting from some significant institutions, Solana could quite possibly position itself among the top blockchains that offer solid prospects to both kinds of investors.

At present, Solana’s potential next steps—expanded DeFi play, ETF approvals, or more institutional inflows—are drawing focus in the crypto community. Of all the networks in crypto, Solana might be the best positioned to become what lots of folks in the community refer to as an “important player.”

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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