Why Ethereum Overtook Solana’s Position
As market volatility slowed activity on Solana, the preferred platform for memecoin traders, Ethereum regained its position as the top smart contract network for DEX trading last month. According to data source DefiLama, Ethereum-based DEXes recorded an industry-high trading volume of $64.616 billion in March, 22% more than Solana’s total of $52.62 billion.
Ethereum surged to the top of the charts for the first time last September, pushing Solana down to number two. The shift in leadership occurred as the overall cryptocurrency market value dropped by 4.2% to $2.63 trillion, continuing the decline that began in February.
The decrease in Bitcoin’s price below $80,000 was caused by macroeconomic uncertainty. According to DefiLlama data, Raydium, the top Solana-based DEX and a hub for meme trading in late 2024, did not record a single day in March with trade volume above $1 billion, a significant decline from its peak of $13 billion on January 18.
Furthermore, compared to the $390 million in mid-January, the daily volume on the memecoin launch pad was less than $100 million in March. The January launch of President Donald Trump’s TRUMP token marked the peak of activity on Solana-based DEXes.
With nearly $30 billion in trade volume, Uniswap outperformed Ethereum with more than $30B, while Fluid came in a distant second with $9 billion in transaction volumes. However, according to on-chain data, ETH dropped more than 18% to $1.8K in March, recording more significant losses than SOL, which dropped 15.8%.
Analysts believe Ether’s poor performance is due to its inflation tokenomics and increasing Layer 2 solutions, which consume more resources from the main chain.
Ethereum Developers Announce Date to Deploy Pectra Upgrade Mainnet
According to Ethereum developers, the Pectra upgrade is expected to launch on the mainnet on May 7, a little later than the predictions that the upgrade period would be in late April. After the success on the Hoodi test network and the core developers’ teleconference on Thursday, they decided to confirm the May date.
Eleven changes are included in the update through Ethereum Improvement Proposals (EIPs) to enhance the network’s staking functionality and usability. This includes strengthening the wallet and account abstraction user experience with EIP-7702, increasing the validator stake cap from 32 to 2,048 ETH with EIP-7251, and extending the optimum blob count to promote rollup scalability with EIP-7691.
Although May 7 is due, it’s important to remember that such timelines are subject to change in light of additional testing or unexpected issues. Approximately 30 days following the Hoodi test in late April, developers had stated in a March meeting that Pectra might be enabled on the mainnet if no significant issues emerged.
They moved the mainnet deployment to early May to give client teams and stakeholders more time to prepare.
Why ETH’s Price Continues to Drop — CryptoQuant
Meanwhile, the Ethereum ecosystem has had a difficult few months, as Ether’s (ETH) price has dropped to levels not seen before 2020. Compared to Bitcoin (BTC) and a few major-cap altcoins, Ethereum is performing significantly worse.
According to an analysis by the market analytics platform CryptoQuant, one of the leading causes of Ethereum’s declining value is a decline in network activity.
A Reduction in Network Activity
Since the start of the year, Ethereum’s active address count has been constantly declining. Average costs per block and every transaction have also fallen to all-time lows.
The ETH burn rate has decreased to its lowest point since the Merge due to low transaction costs and fewer active addresses. To maintain the asset’s deflationary nature over time, Ethereum designed a burn mechanism that removes a percentage of ETH from circulation.
The Merge, which signaled Ethereum’s switch from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus process, sought to support this idea by guaranteeing that more ETH was burned than created. However, more ETH was generated, and less was burned following Dencun’s upgrades last year, which added blobs and lowered transaction fees.
As a result, Ether became inflationary once more. Inflationary pressures on digital assets have increased as the ETH burn rate has been at or around its lowest point since the Merge upgrade.
