Confidently marketed as the "Ethereum Killer" (mainly by SOL bulls), Solana has long been positioned as a viable contender for the world's second-largest blockchain/crypto. But much like Ethereum living in the shadows of Bitcoin, Solana has lived begrudgingly in the shadows of Ethereum.
With a market cap of $387 billion, Ethereum dwarfs Solana's measly $63 billion. Even Binance's BNB $79 billion market cap muscles SOL out of the #3 spot (excluding stablecoins).
However, data from CoinMarketCap (CMC) suggests that 2024 has been a phenomenal year for Solana's growth. At a time when Ethereum has suffered its largest outflows in two years, could now be Solana's time to shine?
Token Listings
As a one-stop shop for everything token-related, CMC offers insights on token listings to reflect which blockchains are seeing the most development.
"By monitoring the number of listing changes, we can gain insight into which sectors or ecosystems are the most active," CMC explains.
In Q2, Solana's ecosystem welcomed more than 20 new tokens and has "continuously topped the growth chart." Ethereum seems to have lagged in the quarter, listing only 14 new tokens.
Year to date, Solana has seen 147 new token listings while Ethereum has seen only 89 new token listings during this period.Interestingly, Ethereum started the year with 138 new tokens compared to Solana's 119.
Nothing Funny About Solana's Meme Lead
Somehow, the crypto industry has matured to a point where memecoins are a genuine metric of ecosystem success. For CMC, Memes and the Solana Ecosystem are the two most popular categories on its website, accounting for 22.5% and 14.6% of views respectively.
On the other hand, the Ethereum ecosystem only garnered 9.6% of CMC's viewership. "Since October 2023, SOL and its meme coin ecosystem have gained significant momentum in both price performance and popularity," CMC states. "While Solana hasn't yet dethroned Ethereum, the surge in interest reveals its growing prominence in the crypto space."
Additionally, there has been a shift towards "anti-establishment" crypto from "traditional" projects, as shown by Solana's ecosystem.
"The rapid influx of liquidity into meme coins creates a casino-like mood, where investors prefer to gamble on high-risk assets rather than rely on more value-oriented, traditional, slower-build projects," CMC explains.
Solana-based memecoins outperformed Ethereum-based memecoins by almost 8x this year. Solana's MEW has grown 19,539% compared to Ethereum's MOG, which topped out at 3484%.
On average, SOL memecoins returned an average of 8,469% compared 962% to ETH.
"This is likely due to the rush of speculative capital from other chains, attracted by the explosive rallies of WIF and BONK, causing more memes to pump and attracting even more capital and attention," CMC said.
Markets and NFTs
Geographically, Solana's dominance is intensifying. In North America, Solana has 14.47% market share, compared to Ethereum's 13.32%. Solana has a bigger market cap than Ethereum in Australasia and South America.
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Solana is also the top chain by active daily addresses, with more than 1.6 million addresses. BNB comes in second place with 1 million.
In terms of NFTs, Solana's low fees and faster transaction speed position it in the lead by user activity metrics like unique wallets and number of transactions.
Meanwhile, "Ethereum NFT market’s total market capitalization and trading volume reflect the trend, showing a gradual decline."
CMC explained that Solana experienced a surge in NFT volume since last October because of Tensor’s airdrop campaign, which saw the protocol become the leading NFT marketplace in Solana.
That said, volume is tapering off as NFT trading volume generally declines.
Team Ethereum
Solana dethroning Ethereum has felt like a pipe dream and whilst the metrics seem to suggest activity on Solana is ramping up, Ethereum's lead still seems far ahead.
As mentioned, Ethereum's dominance in the L1 space of more than 60% is nothing to sniff at. With the SEC's approval of ETH ETFs, we can expect Ethereum's dominance to continue.
Ethereum ETFs are believed to unlock great potential for the cryptocurrency, much like Bitcoin experienced.Bitwise Asset ManagementCIO, Matthew Hougan, believes that these products will attract$15 billionin their first 18 months.
Hougan expects investors to allocate BTC and ETH ETFs in proportion to their market capitalizations (Bitcoin has 74% of the combined market while Etheruem has 26%).
"U.S. investors currently have $56 billion invested in spot Bitcoin ETPs. I suspect this will reach $100 billion or more by the end of 2025, as these ETFs mature and are approved on platforms like Morgan Stanley and Merrill Lynch," Hougan explained.
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