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    Ethereum reclaims 42% outflows from Solana: DeFi Report

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    Solana needs to attract more total value locked (TVL) from Ethereum and its layer-2 networks to grow, says Michael Nadeau from The DeFi Report. Despite drawing billions from Ethereum this year, Solana has lost around $55 million TVL to Base, Optimism, and Arbitrum, and over $1 billion returned back to Ethereum. Nadeau noted that of the $6 billion that left Ethereum’s blockchain, 83% stayed within its ecosystem, moving to its layer-2 chains. On October 28, Solana generated more daily fees than Ethereum due to increased activity in the decentralized exchange, Raydium, based on Solana.

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    Solana is seeing some money flow leave and return to Ethereum, despite attracting funds from other blockchains, says Michael Nadeau from The DeFi Report. According to Nadeau, for Solana to really grow, it needs to attract more total value locked (TVL) from Ethereum and its layer-2 networks. Even though Solana has indeed drawn investments from these sources, it’s crucial to understand that not all that glittered was gold.

    Going by Artemis, a crypto data platform, Nadeau pointed out that Solana has actually lost around $55 million in TVL to Base, Optimism, and Arbitrum this year. Adding to that, despite Solana seeing billions ($2.36 billion to be exact) come in from Ethereum this year, over $1 billion returned back to Ethereum. That means about 42% of the amount Solana initially attracted made its way back to Ethereum.

    And honestly, the money Solana attracted from Ethereum wasn’t all that much to begin with – it was a modest 2.7% of Ethereum’s TVL. As it stands, Ethereum has over $50 billion in TVL according to data provider DefiLlama.

    In spite of Ethereum seeing $6 billion leave its blockchain this year, Nadeau pointed out that a whopping 83% of that stayed within the ecosystem, going to its layer-2 chains. Nadeau believes these funds will continue to be a part of the ecosystem and add value to the layer-1 blockchain.

    In an interesting twist of events, on Oct. 28, Solana drew more daily fees than Ethereum, racking up over $2.54 million in 24 hours compared to Ethereum’s $2.07 million. This was probably down to the increased activity in Raydium, a decentralized exchange, and automated market maker that’s based on Solana.

    Source: Cointelegraph

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