In 2024, Solana has emerged as one of the most popular blockchain networks. A key milestone was reached when, according to Blockworks Research data, Solana's daily on-chain fees consistently exceeded Ethereum's starting around October 19, 2024. By October 24, its revenue even surpassed tens of millions of dollars. This surge is largely attributed to a wave of Meme token launches and vibrant ecosystem activity, drawing significant capital inflows and making Solana a focal point in the crypto space.
From DePin projects to recurring Meme crazes, Solana has captured attention throughout the bull market. But where exactly is this high yield coming from? And can such intense activity be sustained?
Understanding Solana's On-Chain Fees
Similar to Ethereum, Solana's on-chain revenue comprises base transaction fees, priority fees, MEV tips, and voting fees. After its implementation of a burn mechanism—comparable to Ethereum’s EIP-1559—a fixed percentage (initially 50%) of base fees is burned, with the remainder distributed to validators.
Recent data highlights a sharp increase in priority fees and MEV tips (such as those facilitated by Jito) since March 2024. Priority fees are paid by users to expedite transactions, while tips are extra rewards for validators, often related to MEV opportunities. This growth indicates heightened network activity, congestion in DeFi transactions, and greater user willingness to pay for faster execution and improved positioning.
Major Drivers: Meme Tokens and Beyond
A breakdown of on-chain transactions reveals that Meme tokens—especially those launched on platforms like Pump.fun—now dominate Solana’s transaction volume. Over the past two months, Meme-related transactions grew by 667%, accounting for 74% of all activity.
It’s important to note, however, that other categories like project tokens (including DePin and SocialFi tokens), LSTs, stablecoins, and native SOL transfers also saw substantial absolute growth. The relative decline in their share is due to the outsized expansion of Meme trading. This frenzied activity, where timing is critical, drives users to pay higher priority fees, further fueling validator earnings and MEV opportunities.
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Leading DApps and Protocols on Solana
Decentralized Exchanges (DEXs)
Raydium is currently the most active DEX on Solana, capturing 63.5% of the ecosystem's trading volume thanks to its deep integration with Meme tokens. Previously dominant, Orca has seen its market share shrink to about 15%. Pump.fun, primarily a Meme launchpad, also accounts for nearly 5% of trading volume—a share that continues to grow.
Aggregators and Trading Bots
Jupiter, Solana’s leading DEX aggregator, now holds a 33% share by transaction source. Its TVL recently reached a new high of $1.57 billion. The protocol has been particularly active:
- A proposal to extend Active Stake Rewards (ASR) using unclaimed JUP tokens was approved.
- A mobile app supporting Apple Pay and credit cards was launched.
- Ape Pro, a Meme coin terminal with MEV protection, was introduced.
Trading bots are also major contributors, responsible for over 10% of transactions. The top revenue-generating bots include Photon, Trojan, BONKbot, and Banana Gun. Photon earned $29.85 million in the last 30 days alone, making it the second-highest earner in the ecosystem after the Solana mainnet.
Other Key Protocols
Beyond trading, the rise in SOL’s price has boosted protocols offering staking, restaking, lending, and leveraged yield opportunities. Notable examples include:
- Jito: The highest TVL protocol in Solana with over $3 billion locked. Its unique offering includes MEV reward distribution to stakers. The current restaking cap of $25 million has been reached, with plans to raise it soon.
- Kamino: A top yield platform for stablecoins and LST assets, featuring integrated lending and leveraged strategies. Its TVL stands at $2 billion. The upcoming Lend V2 update will permit permissionless lending markets and automated vaults.
- Marinade: A liquid staking protocol with a TVL of $1.79 billion. While its yields trail Jito’s, it has recently attracted institutional interest, growing TVL by nearly 50% in six weeks.
Sustainability and Future Outlook
There’s no denying that the Meme token boom has significantly boosted Solana’s on-chain metrics. However, Meme-driven rallies are often cyclical and tied to bull market conditions. The challenge for Solana will be to build a more resilient and diversified ecosystem that can thrive even when speculative fervor cools.
Learning from the aftermath of past NFT booms, the goal should be to develop sustainable utility and a balanced revenue structure beyond temporary trends.
Frequently Asked Questions
What caused Solana's on-chain fees to surpass Ethereum's?
The primary driver was explosive growth in Meme token trading, which increased network congestion and users' willingness to pay priority fees for faster transactions.
Is Solana's activity entirely dependent on Meme tokens?
No. While Meme trading dominates by volume, other sectors like DePIN, SocialFi, lending, and liquid staking have also grown significantly in absolute terms.
How does Solana's fee burning mechanism work?
Solana burns a fixed percentage of base transaction fees (initially set at 50%), similar to Ethereum's EIP-1559. The rest is distributed to validators.
Which protocols benefit most from Solana's current activity?
DEXs like Raydium, aggregators like Jupiter, and trading bots such as Photon capture significant value. Liquid staking protocols like Jito also earn substantial MEV rewards.
Can Solana maintain its lead if the Meme trend fades?
It will depend on how well the ecosystem diversifies. Projects in DeFi, infrastructure, and real-world use cases must continue to grow to ensure long-term health.
What makes Jito different from other staking protocols?
Jito redistributes MEV rewards to stakers, offering higher yields than traditional staking services. This has made it highly popular among users seeking maximized returns.