Ethereum reclaims #1 DEX trading volume... "Solana pushed back as memecoin craze fades"

▲ Ethereum (ETH)

The speculative fever surrounding new blockchains in the virtual asset market is rapidly cooling. Ethereum (ETH), with its robust infrastructure and deep liquidity, is regaining market dominance by absorbing institutional funds.

Louis Raskin, host of the cryptocurrency YouTube channel Coin Bureau, stated in a video released on May 24 (local time) that “Ethereum had been falling behind competing blockchains like Solana (SOL), but has recently reclaimed the #1 spot in decentralized exchange trading volume.” In January, Solana's DEX trading volume was $116 billion, more than double Ethereum's $53 billion. However, by the end of April, Solana's volume plummeted by 63% to $43 billion, while Ethereum maintained $46 billion, successfully reversing the trend. This is the first time Ethereum has regained trading volume dominance since August last year, indicating that market attention is shifting back to Ethereum.

The rapid growth of the Solana ecosystem heavily relied on the memecoin speculative frenzy rather than organic economic expansion. As demand waned, key indicators simultaneously faltered. Approximately 18.7 million tokens were issued on platforms like Pump.fun, but less than 1% of these tokens surpassed the $50,000 market capitalization threshold required for external exchange listing. After the speculative cycle subsided, Solana's active wallet count decreased from 8.7 million in October last year to 1.9 million currently. Daily application revenue dropped from $85 million in January last year to less than $2 million currently, and the total on-chain deposited value also decreased from $13 billion to $6 billion.

In contrast, Ethereum is strengthening its role as a key hub for institutional funds, thanks to its deep liquidity and stability. Currently, $44 billion, representing 52% of the entire decentralized finance ecosystem, is deposited on the Ethereum mainnet, excluding Layer 2s. In the real-world asset tokenization market, considered a key area for institutional investor influx, Ethereum holds approximately $19 billion, accounting for a 55% share. Over 50% of circulating stablecoins, totaling $164 billion, are also processed on the Ethereum network. The Ethereum spot ETF boasts an asset under management (AUM) of $16.6 billion, making it the largest among altcoins.

Ethereum has continuously enhanced its technical completeness by implementing major upgrades to strengthen its core infrastructure. It started with the Merge upgrade in September 2022, transitioning from Proof-of-Work to Proof-of-Stake, followed by Shapella in 2023, which enabled staked ETH withdrawals, and the Dencun upgrade in March 2024, which significantly reduced Layer 2 rollup costs. Notably, the Pectra upgrade in May last year increased the maximum validator balance from 32 ETH to 2,048 ETH, reducing operational burdens for institutions and improving user wallet convenience. In December of the same year, the Husaka upgrade introduced a technology allowing nodes to verify by sampling only a portion of the data, thereby boosting scalability.

Ethereum developers are preparing the Glamsterdum upgrade, which includes parallelization technology to process transactions simultaneously, for the first half of this year. In the second half, the Hygoto upgrade is scheduled, aiming to reduce network congestion and fees by lowering the burden of historical data storage on nodes. Despite long-term price fluctuations and the emergence of competing platforms, Ethereum's reliability and infrastructure maturity, proven through multiple market cycles, are considered an irreplaceable competitive advantage. Institutional investors, managing vast capital, prioritize security and deep liquidity over speed, thus choosing Ethereum as a trusted asset.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*