Solana’s TVL Surges Amid $2.36 Billion Inflows from Ethereum, but ETH Recovers Nearly Half
2024-11-01

High-performance blockchain Solana SOLUSD has garnered attention for significant inflows from other blockchains, with its total value locked (TVL) surging as a result of these inflows. An examination of the data, however, shows a more nuanced picture, with Ethereum ETHUSDT recovering 42% of Solana’s inflows.
According to data from Artemis Labs shared by DeFi Report founder Michael Nadeau, Solana has seen substantial inflows year-to-date, with $2.36 billion coming from Ethereum, although ETH saw $1 billion of those funds return.
The data shows that only 2.7% of Ethereum’s TVL migrated to Solana year-to-date, with the second-largest network by market capitalization seeing $6 billion of net outflows so far this year. 83% of those outflows, Nadeau wrote, went to Layer-2 networks within its ecosystem, where they “continue to drive value to the L1.”
No. Adding some context (and data) changes the story regarding flows to Solana from other chains👇
Over the last month, @base is #1 in terms of net flows ($463m). @solana is #2 with $197m of net flows. @SuiNetwork #3 with $120m.
If we zoom out to Year-to-Date, @arbitrum… https://t.co/FXd7kqJ2YD pic.twitter.com/mqqfRnGxpc
The data also shows that over the past month, Coinbase’s Layer-2 network Base led in terms of net flows, with $463 million entering the network. Solana came in second with $197 million of net flows, ahead of Sui’s $120 million.
Year-to-date, Ethereum’s layer-2 networks have led in terms of net flows, however, with Arbitrum seeing $2.4 billion and Optimism seeing $2.2 billion. Base comes in third, with $1.6 billion of net flows.
Solana’s rise has nevertheless been notable this year, with its price significantly outperforming most other digital assets to the point that it’s nearly overcoming Binance’s BNB to become the fourth-largest digital currency by market capitalization.
It’s worth pointing out that both cryptocurrencies have very distinct supply mechanics, even though both are gas tokens used within their blockchains that power their decentralized finance ecosystems.
While BNB has a real-time burning mechanism that was introduced with BEP-95 and sees a portion of the collected gas fees get burned in each block in a bid to reduce its total circulating supply, Solana doesn’t have a maximum supply, but rather an inflation mechanism.
Solana is an inflationary token whose supply increases at a predetermined rate. At launch, it had a 500 million SOL supply allocated during the creation of the genesis block —the first block on a blockchain. The current total supply now stands at 587 million SOL.
Featured image via Unsplash.