Ethereum

Solana

Raydium

Phoenix

Solana has overtaken Ethereum on various metrics this week but a recent research article on X claims that most of this activity is conducted by bots.
The article, published by pseudonymous researcher <a href="https://x.com/Flip_Research/status/1818216739680710776" target="_blank" rel="noopener noreferrer nofollow">Flip Research</a> on July 30, found a suspiciously high count of daily transactions per user on Solana.
Solana recorded an average of 217 transactions per user on July 26 across 1.3 million active addresses. In comparison, Ethereum only recorded less than three transactions per user across 376,300 active users.
“What's clear is there's a massive discrepancy, combined with a high amount of MEV and wash trading,” Flip Research told Cointelegraph.
According to Blockworks Research, Solana’s $25 million in total fees in the week of July 22 <a href="https://cointelegraph.com/news/solana-beats-ethereum-weekly-total-fees-research" rel="noopener noreferrer nofollow">surpassed Ethereum’s total fees</a> of $21 million. Solana also clocked the <a href="https://x.com/_ryanrconnor/status/1815753548841300025" target="_blank" rel="noopener noreferrer nofollow">highest 30-day DEX volume</a> in the industry.
In the seven days to July 30, Raydium led Solana’s DEX trading volume with $6.078 billion. Orca and Phoenix trailed with $3.428 billion and $1.144 billion, respectively.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-07/31e7e956-8df1-4c67-8e4d-e5ae939c2db3.png" alt="Bots suspected of pushing Solana over Ethereum — Research" title="">
 <figcaption style="text-align: center;">Solana’s DEX trading volume. Source: DefiLlama
 </figcaption>
</figure>
However, a big chunk of Solana’s transactions are believed to be driven by inorganic trading activities and bots, as suggested by Flip Research’s analysis of Raydium’s liquidity pools.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-07/c6161695-b69d-4dac-86ac-58a31af2793f.png" alt="Bots suspected of pushing Solana over Ethereum — Research">
 <figcaption style="text-align: center;">Low liquidity pools on Raydium. Source: Raydium
 </figcaption>
</figure>
Countless liquidity pools on Raydium have little to no liquidity but generate unreal trading volumes. For example, the <a href="https://dexscreener.com/solana/qxef7itx6su7ir1xumdg3jofbgisqpvgzhefruzvdky" target="_blank" rel="noopener noreferrer nofollow">FLOG-SOL</a> pool held just $3 in liquidity but had over $5 million in 24-hour trading volume.
<a href="https://cointelegraph.com/news/pump-fun-flips-ethereum-24-hour-revenue-generation" rel="noopener noreferrer nofollow">Related: Pump.fun flips Ethereum in 24-hour revenue generation — DefiLlama</a>
Flip Research’s analysis of these low liquidity pools suggests that they are rugpulled projects, a <a href="https://cointelegraph.com/magazine/5-risks-apeing-new-solana-memecoins/" rel="noopener noreferrer nofollow">common type of exit scam </a>that has been rising in popularity among memecoin scammers.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-07/6ca21c88-6d72-446b-8d63-7d7b43aa1290.png" alt="Bots suspected of pushing Solana over Ethereum — Research" title="">
 <figcaption style="text-align: center;">FLOG’s price movement on Raydium mirrors that of rug pulled projects observed by Flip Research. Source: Dexscreener
 </figcaption>
</figure>
One of the projects analyzed by Flip Research had $10.8 million of volume from $48 in liquidity, with 2,845 unique wallets wash trading the token to generate $28,000 in fees.
The wallets involved appear to be bots conducting thousands of transactions resulting in fake volumes before the rug was pulled off the project.
The researcher added that Raydium’s standard liquidity pools had over 50 rug projects that generated $200 million in trading volume and $500,000 in fees in 24 hours.
“[Solana] is the established 'memecoin casino', which is attracting volume from some least price sensitive and highest risk tolerance users,” Flip Research told Cointelegraph.
<a href="https://cointelegraph.com/news/tron-surpasses-ethereum-revenue-generation" rel="noopener noreferrer nofollow">Related: Tron surpasses Ethereum: $1.42M revenue in 24 hours</a>
“This leaves them open to exploitation from a number of actors, such as MEV bots, serial scammers, and insiders,” they said.
<h2 id="solana-s-bot-volume-has-been-around-all-year">Solana’s bot volume has been around all year</h2>
Bots can operate at a restless pace that humans can’t, and their automated trades have been pumping Solana’s volumes all year.
In February, the network’s monthly stablecoin volume surpassed $643 billion. Most of the stablecoin volume came from USD Coin (<a href="https://cointelegraph.com/usdc-price-index" rel="noopener noreferrer nofollow">USDC</a>) transactions on Phoenix, a Solana DEX.
Cointelegraph Magazine’s February analysis of blockchain transactions on Phoenix transactions found that the majority of the volume came from bots.
These automated traders have been a double-edged sword for Solana, as their activities have resulted in favorable metrics at the expense of the network’s health.
By April 2024, developers <a href="https://cointelegraph.com/news/solana-mainnet-beta-update-resolve-congestion-issues" rel="noopener noreferrer nofollow">responded to congestion issued by releasing a mainnet update</a>, though Flip Research’s findings suggest that bot activity is still rampant in the network.
<a href="https://cointelegraph.com/magazine/defi-bots-pumping-solana-stablecoin-volume/" rel="noopener noreferrer nofollow">Magazine: The DeFi bots pumping Solana’s stablecoin volume</a>

Bots suspected of pushing Solana over Ethereum — Research

Inhoudsopgave

Cointelegraph

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