While Solana has been getting inflows from other blockchains, a large portion of the value that went to Solana made it back to Ethereum, according to Michael Nadeau, the founder of The DeFi Report.
In an X post, Nadeau said that Solana needs to pull total value locked (TVL) from Ethereum and layer-2 networks. He wrote:
“[…] But the only thing that really matters for Solana is pulling TVL from Ethereum (and the L2s). Why? That’s where all the value sits today. Is it happening? Not really.”
Citing data from crypto data platform Artemis, Nadeau highlighted that year-to-date (YTD), Solana lost about $55 million in TVL to Base, Optimism and Arbitrum.
Top 15 net flows Source: Artemis
Over $1 billion flowed back to Ethereum
Nadeau also pointed out that Solana saw $2.36 billion in inflows from Ethereum in its YTD chart. However, the DeFi Report founder also noted that more than $1 billion flowed back to Ethereum. This represents 42% of the amount that flowed to Solana.
The executive also said that the amount that flowed to Solana from Ethereum YTD is “modest” as it only accounted for 2.7% of the blockchain’s TVL.
At the time of writing, data provider DefiLlama shows that Ethereum has over $50 billion in TVL.
The DeFi Report founder also noted that while Ethereum has seen $6 billion in net outflows YTD, the blockchain saw 83% of the outflows going to layer-2 chains. Nadeau sees these as values that are still within the ecosystem.
The executive believes these assets will continue to drive value to layer-1, explaining that most of the value that left the chain is being used within its ecosystem.
Related: Solana price hits 3-month high as data hints at SOL rally above $200
Solana flips Ethereum in blockchain fees
Meanwhile, Solana flipped Ethereum in daily fees on Oct. 28. At the time, Solana generated over $2.54 million in fees within 24 hours, surpassing Ethereum’s $2.07 million. This made Solana the fifth-largest fee-generating protocol on that day.
The blockchain’s surge in fees generated is linked to the growing activity in Raydium, a decentralized exchange (DEX) and automated market maker built on Solana.