While Solana has received inflows from other blockchains, a large portion of that value made it back to Ethereum, according to Michael Nadeau, 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 said that Solana saw $2.36 billion in inflows from Ethereum in its YTD chart. Still, more than $1 billion flowed back to Ethereum, representing 42% of the total.
He added that the flow to Solana from Ethereum YTD was “modest,” accounting for only 2.7% of the blockchain’s TVL.
At the time of writing, data provider DefiLlama shows that Ethereum has more than $50 billion in TVL.
Nadeau said that while Ethereum has had $6 billion in net outflows YTD, 83% of this went to layer-2 chains that are still within the ecosystem.
He said these assets will continue to drive value to layer 1, as 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 was linked to increasing activity in Raydium, a decentralized exchange (DEX) and automated market maker built on Solana.