Solana's ecosystem demonstrated remarkable resilience and growth throughout the second quarter of 2024. Despite a cooling broader market and a 25% decline in SOL's dollar-denominated market cap to $68 billion, fundamental on-chain activity and ecosystem development remained strong.
Key metrics from the quarter highlight this positive trend:
- While Solana's DeFi TVL decreased by 9% in dollar terms to $4.5 billion, it grew by 26% when measured in SOL, indicating sustained capital confidence within the network.
- The amount of staked SOL saw a quarterly increase of 5%, reaching 378 million SOL by the end of Q2.
- The liquid staking ratio (the percentage of staked SOL that is liquid staked) grew significantly by 22% to reach 6.4%.
- The network's total economic value, comprising transaction fees and MEV, surged 41% in SOL terms to 967,000 SOL ($151 million).
- Network activity remained high, with the average daily fee payers increasing 51% year-over-year to 900,000.
This article decodes the five core protocols that were instrumental in driving Solana's Q2 growth and explores the potential catalysts for Q3.
pump.fun: Fueling On-Chain Activity Through Meme Coin Mania
pump.fun emerged as a major catalyst for on-chain engagement. This platform allows users to create meme tokens easily without the initial need for providing liquidity. A surge in celebrity-backed token launches on the platform in May ignited a wave of activity.
The platform generated an impressive $48 million in revenue during Q2, averaging $525,000 daily. More importantly, it directly fueled Solana's network usage. Data shows over one million transactions were solely for meme coin deployments on pump.fun, with daily active addresses on the platform consistently exceeding 60,000 by June. This frenzy led to a substantial increase in the proportion of non-voting transactions within Solana's total fee generation.
Raydium: The Primary Engine for DeFi TVL Growth
The meme coin phenomenon had a direct and positive ripple effect on Solana's decentralized exchanges (DEXs). Spot DEX volumes grew 32% quarter-over-quarter (QoQ), reaching an average daily volume of $1.6 billion.
Raydium was a primary beneficiary. It serves as the automatic liquidity destination for tokens launched on pump.fun once they reach a $69,000 market cap threshold. Consequently, Raydium's average daily volume skyrocketed 77% QoQ to $867 million, increasing its market share from 40% in Q1 to 54% in Q2.
Its TVL also grew 46% to $991 million, cementing its position as Solana's top DeFi protocol. It came to represent approximately 65% of Solana's total DeFi TVL. A comparative look at Uniswap on Ethereum reveals a narrowing gap; Raydium's fees even surpassed Uniswap's over a recent 30-day period, and it boasted more unique active addresses. 👉 Explore more on-chain data and analytics
Jupiter: Dominating in Both Spot and Derivatives Volumes
Jupiter solidified its role as a cornerstone of the Solana ecosystem. Although its dominance in spot DEX volume was challenged by Raydium's growth—evolving from a majority share to a near-equal "duopoly" by the end of the quarter—it remained a powerhouse.
Jupiter maintained the highest total DEX volume for Q2. Furthermore, its perpetual futures platform, Jupiter Perps, saw average daily volume grow 13% to $370 million. By the end of the quarter, Jupiter Perps' TVL had climbed to become the largest in Solana's derivatives market. This dual dominance in both spot and derivatives underscores Jupiter's massive contribution to Solana's Q2 expansion.
Zeta Markets: Notable Surge in Derivatives Trading Activity
Zeta Markets, a perpetual futures DEX on Solana, posted standout growth in the derivatives segment. Its average daily trading volume for perpetual contracts surged an astounding 212% QoQ to $82 million.
This growth significantly outpaced that of its main competitor, Drift, which saw its daily volume decline by 11% to $127 million. While Drift maintained a higher TVL throughout the quarter, Zeta's explosive volume growth made it a more dynamic contributor to ecosystem activity in Q2. The extent to which this growth was fueled by genuine demand versus airdrop farming incentives remains an open question, making its future trajectory particularly interesting to watch.
Sanctum: Revitalizing Solana's Liquid Staking Token (LST) Landscape
The Liquid Staking sector on Solana was a highlight of Q2, largely due to the impressive entry of Sanctum. While Jito (with jitoSOL) remained the market leader with a 47% share and 22% growth, Sanctum emerged as a disruptive force.
Launched near the end of Q1, Sanctum is a liquidity infrastructure protocol for LSTs. It experienced meteoric growth, introducing 44 new LSTs and capturing nearly 14% of the market share—a 3,700% QoQ increase, with a TVL exceeding 5.77 million SOL.
Sanctum's arrival injected new vitality into the sector. Solana's overall liquid staking ratio grew 22% to 6.4%. Although this still lags behind Ethereum's rate of over 40%, Sanctum's innovation and focus on LST liquidity have strengthened the narrative and improved Solana's potential to catch up. While its growth may have been initially accelerated by airdrop campaigns, the sustained growth of Jito post-airdrop suggests a robust underlying demand for Solana LSTs.
Frequently Asked Questions
What was Solana's DeFi TVL in Q2 2024?
Solana's DeFi Total Value Locked (TVL) was $4.5 billion when measured in U.S. dollars. However, when measured in SOL, the native cryptocurrency, the TVL actually increased by 26%, showing that more value was locked within the ecosystem despite the price volatility of the asset itself.
Which protocol contributed most to Solana's DEX trading volume?
Raydium was a major driver of volume, seeing a 77% increase in its average daily trading volume and capturing 54% of the market share. However, Jupiter also handled a massive share of the volume, making these two protocols the dominant forces for trading activity on Solana in Q2.
What is Blinks (Solana Actions)?
Blinks, or Solana Actions, is a new feature introduced at the end of Q2. It allows users to execute on-chain transactions directly from any digital environment, like a social media post or a website, without needing to navigate to a separate app. This significantly simplifies the user experience for interacting with Web3.
How did Solana's NFT market perform in Q2?
The NFT market on Solana faced headwinds in Q2. Average daily NFT trading volume declined by 56% to $3.4 million, and the average number of NFTs minted daily fell by 70% to 858,000. This contrasts with the strong growth seen in the DeFi and liquid stating sectors.
What is the significance of Sanctum for Solana?
Sanctum plays a crucial role in improving the liquidity and efficiency of Liquid Staking Tokens (LSTs) on Solana. By making it easier to hold, swap, and use various LSTs, it strengthens the entire staking ecosystem, making it more attractive for users to stake their SOL without sacrificing liquidity.
Could Blinks be a major catalyst for Q3?
Yes, Blinks has the potential to be a significant growth driver. Its ability to embed complex blockchain interactions into simple social media clicks could unlock new use cases for both NFTs and token launches, potentially revitalizing the NFT market or creating a new wave of viral consumer crypto applications on Solana.
Outlook for Q3: Expansion and the Blinks Catalyst
The second quarter was undoubtedly powered by the "protocol five" outlined above, driving progress in DeFi, liquid staking, and overall network activity. However, areas like NFTs showed notable weakness.
The key innovation heading into Q3 is the full rollout of Solana Actions and Blinks. This technology enables seamless on-chain interactions from anywhere on the web, most notably from social media platforms like X (formerly Twitter). An early example was the rapid minting and subsequent price surge of the "SEND IT" NFT collection using Blinks in early July.
This demonstrated Blinks' powerful potential for discovery, distribution, and user acquisition. If integrated widely by major protocols—a trend already starting with Jupiter, Tensor, and others—Blinks could be the key that unlocks the next wave of growth. The question for Q3 is whether this new primitive will breathe life into the NFT market, propel another meme coin cycle, or pioneer an entirely new category of consumer crypto on Solana. The ecosystem's ability to expand from its core "protocol five" to a broader set of contributors may hinge on this innovation.