Solana transfer volume surges to $224B amid scrutiny

Glassnode has reported a substantial increase in Solana's (CRYPTO:SOLANA) transfer volume, reaching around $224 billion which is equivalent to three times the blockchain’s market capitalisation.

This surge appears to be driven by an active wallet, possibly an arbitrage bot, which has increased its transactions since October.

This activity has also led to a rise in Solana’s transaction fees, which have doubled over the past month, reaching $0.0658 in early November 2024.

Investment firm VanEck has noted Solana’s efficient, low-cost infrastructure as a factor behind the rise in network engagement.

However, its report also highlighted concerns around wash trading on the Solana network.

Wash trading involves repeated transactions that artificially inflate trading volume.

According to VanEck, approximately 14.2% of Solana’s revenue stems from wash trading, a higher rate than observed on Ethereum.

VanEck’s report includes risk disclosures for Solana-based products, aiming to increase transparency for investors.

Some critics point out that speculative trading activity, particularly in meme-based tokens, may be influencing Solana’s transfer volume, casting doubts on the sustainability of these figures.

While increased network usage may suggest a healthy growth trend, reliance on bot activity and speculative trades raises questions about the blockchain’s long-term resilience.

At the time of reporting, the Solana (SOL) price was $161.05.