Ethereum and Bitcoin users rush to Solana [SOL] as you search…

• High transaction fees on Ethereum and Bitcoin have led to increased network activity on Solana.
• As network activity increases, other ecosystem metrics are seeing a decline.

Solana saw an influx of new users due to Ethereum’s high transaction fees [ETH] and bitcoin[BTC] drove new demand on the Layer 1 (L1) network, data from The Block showed.

Read Solanas [SOL] Price prediction 2023-24

On the Ethereum network, the meme coin craze fueled by the unprecedented surge in frog-themed Pepe (PEPE) price, trading volume and market cap led to a surge in on-chain transaction fees.

According to data from Messari, average transaction fees rose to a high of $27.61 on May 9, the highest since May 2022.

As for the Bitcoin network, the launch of ordinals and BRC-20 tokens led to a significant increase in network activity and on-chain fees.

Data from Messari also showed that average transaction fees on the chain hit as high as $30 on May 8, the highest since April 2021.

SOL emerges as the winner

In an effort to find blockchain networks that offer lower transaction fees, users have turned away from Ethereum and Bitcoin.

Solana emerged as a top contender in this search, garnering increased attention and resulting in an increase in the number of active addresses on its network. Data from The Block showed a 113% increase in the number of daily active addresses on the chain.

On a monthly basis (MoM), Solana recorded a total of 7.72 million active addresses in April. Interestingly, the chain has about two weeks left in May to already have 7 million active addresses.

Source: The Block

In addition, data from The Block showed that the number of new addresses on the chain has increased significantly since late April.

New users are pouring in

4.19 million new addresses were created in Solana in May, surpassing the 3.76 million new addresses that joined the network in April.

Source: The Block

This surge in new address creation on the L1 network underscores the growing acceptance of the platform in the face of high transaction fees on the Ethereum and Bitcoin networks.

But while Solana’s network activity has seen growth since late April, data from artemis revealed a decline in other ecosystem metrics.

For example, according to the on-chain data, the network’s Total Value Locked (TVL) has been in a downtrend since April 19. It was $269.78 million at press time and is down 8% since then.

Source: Artemis

Realistic or not, here is SOL’s market cap in BTC

Likewise, the decentralized exchanges (DEXes) located in the L1 network have seen a drop in transaction volume since the beginning of the month. According to data from Artemis, DEX volume on Solana has plummeted 66% since early May.

Source: Artemis

The value of the chain’s native coin SOL, which was trading at $20.73 at press time, is down double digits (17%) over the past month.

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