- Over $107 million was bridged to Solana from multiple blockchains in early May.
- The figure shows the extent of cross-chain transfers.
- Cross-chain transfers facilitated by Wormhole and deBridge Finance.
Solana, known for its high throughput capabilities, has recently been the center of substantial financial activity. In the first two weeks of May, over $107 million was moved to Solana from various other chains, including Ethereum.
This movement was enabled by bridging technologies such as Wormhole and deBridge Finance, which are pivotal in facilitating these transfers. However, the figure only shows one part of the picture.
Solana Sees Spike in Cross-Chain Activity
In the first two weeks of May, Solana saw increased cross-chain activity. Notably, the network saw a total inflow of $107 million from various chains, including Ethereum, Base, and others. This traffic was facilitated by cross-chain platforms Wormhole and deBridge Finance.
According to the data from these platforms, most inflows to Solana came from Ethereum. On Wormhole, Ethereum inflows accounted for $36 million, while those on Wormhole were at $26 million for the same period.
A significant inflow came from Base, Coinbase’s native network, Arbitrum, Sui Network, and Aptos. However, Solana also experienced significant outflows to these networks. These amounted to $96 million across Wormhole and deBridge Finance. This leaves Solana with a net inflow of $11 million over that period.
Despite the relatively modest net inflows, the figures reveal the extent of cross-chain activity in most major chains. Traders, rather than staying on one network, often move their assets to different chains, either to convert their assets or seek opportunities where they present themselves.
Solana Memecoins Attract Traders From Other Chains
Solana has recently attracted traders from other chains, thanks to the surging interest in memecoins. Specifically, traders appreciate Solana’s low fees and high speeds, making it ideal for small purchases. These features also attract high-frequency traders, including bots, further boosting Solana’s traffic.
However, having made their profits, many traders opt to convert their assets to other cryptos, including those on chains like Ethereum. On the other hand, some use their profits to invest in opportunities in other chains, including Base and Sui.
This cross-chain activity underscores the substantial role interoperability protocols like Wormhole and deBridge Finance play in the blockchain. These platforms allow seamless transfers between disparate blockchains, boosting their liquidity.
On the Flipside
- A high degree of interoperability will make keeping users on their platforms difficult for any specific chain. If traders can seamlessly move assets across chains, user retention will become an issue.
- Solana has been battling with network congestion issues, leading to a high degree of transaction failures. Despite emerging over a month ago, these issues have still not been resolved.
Why This Matters
The substantial volume of inflows to Solana demonstrates significant inter-network activity. It points to the growing importance of multi-chain solutions for the future.
Read more about Solana founder’s take on a multi-chain future:
Solana Founder Denounces ‘ETH Killer’ Label, Sees Coexistence
Read more about Worldcoin taking even more criticism:
Is Worldcoin About to Crash? Shortseller Reveals Bearish Case
