Ethereum and Bitcoin users flock to Solana [SOL] as they seek…

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High transaction fees on Ethereum and Bitcoin have led to increased network activity on Solana. While network activity is growing, other ecosystem metrics are declining.

Solana has seen an influx of new users in the form of high Ethereum transaction fees [ETH] and Bitcoin[BTC] generated new demand on the Layer 1 (L1) network, according to data from The Block.

Read Solanas [SOL] Price Prediction2023-24

On the Ethereum network, the meme coin craze led by the unprecedented rise in price, trading volume and market capitalization of the frog-themed Pepe (PEPE) has caused transaction fees to spike on the chain.

According to data from Messari, average transaction fees peaked at $27.61 on May 9, its highest level since May 2022.

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

Data from Messari further showed that the average on-chain transaction fee hit $30 on May 8, its highest level since April 2021.

SOL emerges victorious

Intending to find blockchain networks offering lower transaction fees, users have moved away from Ethereum and Bitcoin.

Solana has emerged as one of the main contenders in this quest, attracting increased attention and leading to an increase in the number of active addresses on its network. Data from The Block revealed a 113% increase in the number of daily active addresses on the chain.

Measured on a monthly basis (MoM), Solana recorded a total of 7.72 million active addresses in April. Interestingly, with about two weeks left in May, the channel has already seen 7 million active addresses.

Source: The Block

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

New users flock

In May, Solana witnessed the creation of 4.19 million new addresses, surpassing the number of 3.76 million new addresses that joined the network in April.

Source: The Block

This increase in the creation of new addresses on the L1 network highlights the growing adoption of the platform amid high transaction fees on the Ethereum and Bitcoin networks.

However, while activity on the Solanas network has seen growth since late April, data from Artemis showed a decline in other ecosystem metrics.

For example, according to on-chain data, the networks’ total value locked (TVL) had been on a downward trend since April 19. At $269.78 million at press time, it has since fallen 8%.

Source: Artemis

Realistic or not, here is the market capitalization of SOL in BTCterms

Similarly, decentralized exchanges (DEXs) hosted within the L1 network have suffered a decline in trading volume since the beginning of the month. According to data from Artemis, DEX volume on Solana has fallen 66% since early May.

Source: Artemis

As for the native SOL Chains coin, trading at $20.73 at press time, its value has declined by double digits (17%) over the past month.

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