Is Solana’s high transaction fee affecting network activity?

• Solana’s revenue increased over the last three months.
• SOL’s price action was bullish, but market sentiment remained bearish.

2024 has been optimistic for Solana [SOL], as it quickly gained a substantial amount of market capitalization.

While the token’s price surged, another key metric also climbed up, which might harm the blockchain’s stats.

A look at Solana’s network activity

Latest datasets revealed that Solana’s average transaction fees have risen sharply over the past few months. The blockchain average fee crossed $0.03, way more expensive than average L2s.

High transaction fees might hurt network activity, as users might execute fewer transactions because of the high cost. Therefore, to see whether this was the case with Solana, AMBCrypto checked Artemis’ data.

Our analysis revealed that despite high transaction costs, SOL’s daily active addresses remained relatively high throughout the last three months.

A similar increasing trend was also noted in terms of its daily transaction count. This proved that users were willing to pay high transaction costs on Solana.

The high fees also had a positive impact on the blockchain’s captured value. This was evident from the rise in its revenue, which spiked sharply on the 31st of January.

However, the graph started to decline during the following days.

Apart from that, things in the DeFi space also looked pretty optimistic. AMBCrypto reported earlier that SOL’s TVL reached the $2 billion mark as it displayed consistent growth in the metric since December 2023.

Solana investors are rejoicing

Solana’s performance on the price front also remained promising last month. According to CoinMarketCap, SOL was up by more than 17% in the last 30 days.

At the time of writing, SOL was trading at $102.91 with a market capitalization of over $45.3 billion, making it the fifth-largest crypto.

The good news was that SOL’s development activity was high, reflecting efforts made by developers to improve the blockchain. However, despite the massive price rise, SOL’s social volume dropped last month.

Notably, bearish sentiment around the token was dominant in the market.

Nonetheless, the derivatives market metrics looked bullish on Solana. For instance, Solana’s Binance Funding Rate was green. This meant that Futures investors were actively buying SOL.

Its Open Interest also remained high, indicating that Solana’s growth spree might continue.