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High Fees On Ethereum, Bitcoin is Good News for Solana

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By Augustine Mbam - - 5 Mins Read
Solana blockchain, neon theme

The drastic fee increase in major blockchains like Ethereum and Bitcoin seems good news for Solana, as it has seen its daily users increase to a new level. According to data from the Block, the average number of persons coming to use the Solana blockchain increased to the highest level in almost a year.

This trend immediately appeared after Bitcoin and Ethereum transaction fees became significantly higher than Solana fees per transaction. Solana is a layer 1 blockchain network, and it saw the seven-day moving average of new addresses hit 304,640 on Monday.

This is the first time the blockchain will see such a massive number in its user base for almost a year. The last time the blockchain network saw a number above 304,000 was in June last year. Since then, the blockchain has been plagued with many issues that made it lose some users. 

However, users seem to be returning to Solana after seeing the massive fee increase in the Bitcoin and Ethereum blockchains. Data shows that the transaction fees in top blockchains such as Bitcoin and Ethereum have experienced a whopping three-month high in terms of high transaction fees.

Also Read: Alternative Blockchains Solid Enough to Replace Solana

After this report was made last week, the Solana network saw its daily users increase to new heights. The crypto blockchain recorded more daily users throughout May than during April. On the other hand, the number of daily transactions is reducing in different blockchains. Especially in Bitcoin, the number of daily transactions happening on the blockchain has hit its low since June 2021. That is quite a vast difference between Bitcoin and the Solana blockchain. 

Solana market cap dominance (Messari)

Solana Came In as a Great Alternative 

Many experts say Solana sees a massive increase in their daily user base because they serve as a great alternative to Ethereum and Bitcoin blockchains. From what these experts said, the Solana fees per transaction make it more attractive whenever Ethereum or Bitcoin blockchain starts charging exorbitant fees.

"The increase seemed to start earlier in May when fees started rising on Ethereum and had people looking for other places to transact, but that second rally could also be tied to the Ethereum finality issues," The Block research analyst Rebecca Stevens said. 

Before getting as many users as it is now, the Solana blockchain was often roasted for the outages users often experienced. But within the past weeks, two incidents exposed Ethereum's beacon chain, as it briefly stopped finalizing blocks. Situations like these are changing the perception people have about the Solana blockchain.

"Solana has faced a lot of pushback over its outages, so the recent Ethereum network troubles could be putting things in perspective," Rebecca Stevens added.

On the other hand, Solana's price has been making some massive recovery since the collapse of FTX. The collapse of FTX has brought many tribulations to the cryptocurrency as it was somehow affiliated with the failed exchange. However, it has slowly recovered its price, trading at above $20 instead of less than $10 in December 2022.