30s Summary

The on-chain trading ecosystem of Solana is proving to be highly profitable, ranking third in financial sectors in crypto. 75-90% of Solana’s transaction fees stem from trading-linked activity, significantly surpassing Ethereum and other networks. Though Solana’s layer 2 solutions face scalability challenges, it benefits from its distinct fee dynamics. Most of the revenue is generated by “memecoins”, of which over 3 million have been launched since 2024. Additionally, trading bots like Photon, Bankbot and Trojan on Telegram have seen significant returns, suggesting that Solana’s traders are not highly sensitive to execution fees. Notably, Solana’s fee spending peaks during U.S West Coast hours.

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Solana’s on-chain trading ecosystem is making big bucks. This is all thanks to its unique structure that offers traders a lot of opportunities. In fact, it’s one of the most profitable financial sectors in crypto, coming third behind stablecoins and layer 1s.

According to David Duong and David Han from crypto exchange Coinbase, 75-90% of Solana’s transaction fees come from trading-linked activity. This is way higher than what Ethereum and other networks like Base and Arbitrum manage to collect.

Those using Solana’s layer 2 solutions have also seen a lot of growth and innovation. But they’re still facing challenges when it comes to scalability and user fragmentation. Solana, on the other hand, is enjoying unique benefits because of its distinct fee dynamics and user activity patterns.

Most of the revenue generated by the Solana ecosystem is from so-called “memecoins” – cryptocurrencies that are mostly jokes with high volatility. Over 3 million of these coins have been launched on the platform since the start of 2024, bringing in huge earnings.

According to Coinbase, trading bots on Telegram have been surprisingly profitable too, even surpassing the earnings of pump.fun. The most profitable ones like Photon, Bankbot and Trojan are all based exclusively on Solana. The analysts think that this suggests that a large number of traders on Solana aren’t really sensitive to execution fees. This might be due to the higher volatility of the assets involved, as well as the lower liquidity.

Interestingly, most of the fee spending on Solana tends to peak during the U.S. West Coast hours. According to Duong, this suggests that there’s a distinct group of active users in that region.