This Altcoin Gem Will Overtake Solana, Predicts Arthur Hayes
Arthur Hayes, co-founder of crypto exchange BitMEX, has predicted that the blockchain Aptos (APT) is poised to surpass Solana (SOL) in prominence and utility in the race for the second largest Layer 1 (L1) blockchain behind Ethereum within the next two to three years. Hayes conveyed his thoughts during a detailed interview with macro analyst Raoul Pal.
Aptos Could Overtake Solana
Hayes indicated that the potential for Aptos to outperform Solana and ascend as the second-ranking L1 protocol after Ethereum is significant, but did not delve into the specific catalysts behind his assertion during the conversation. He promised a more detailed exposition of his views in September.
The emergence of Solana in March 2020 marked a significant milestone in the blockchain landscape. Solana was heralded as a solution to several limitations of Ethereum, particularly concerning scalability, speed, and cost-efficiency. These attributes were crucial as the Ethereum network grappled with severe congestion issues during the DeFi boom, prompting the search for viable alternatives.
Solana’s ascent in the crypto hierarchy was notably accelerated with the launch of the memecoins BONK in December 2022 and dogwifhat (WIF) in November 2023, both pivotal moments that marked the first major departure of memecoin activities from Ethereum’s ecosystem. Both memecoins not only boosted Solana’s visibility but also attracted an array of memecoins and innovative DeFi platforms, drawn by lower transaction costs.
However, similar to Ethereum, Solana faced its own challenges at the beginning of the year with network congestion as its popularity surged, demonstrating the persistent scalability issues within current blockchain infrastructures.
Aptos, on the other hand, has maintained a record of zero downtime since its inception, positioning it as a robust and reliable alternative within the digital currency ecosystem. Its foundation rests on the novel smart contract programming language “Move,” developed by engineers formerly associated with Meta Platforms Inc.’s Diem project.
Although Diem was ultimately shelved, the expertise and technological advancements have been redirected into Aptos, emphasizing its suitability for commercial use and potential for widespread adoption. However, Aptos has not yet been widely adapted. The blockchain currently has neither a popular DeFi ecosystem nor any major memecoins.
APT Price Analysis
This is reflected in Aptos’s market performance. Currently, Aptos (APT) has retreated 63% from its January 2023 high of $20.39, trading at $7.50 after experiencing a significant downtrend from its March peak of $19.48. The decline has taken APT below the 0.236 Fibonacci retracement at $8.39.
The cryptocurrency’s trajectory has also seen it falter below the 50-week Exponential Moving Average (EMA), now at $9.25, which has emerged as a major resistance level. APT has faced multiple rejections at this threshold, underscoring its importance for any potential reversal to bullish momentum. Moreover, maintaining a position above the year’s lowest price of $7.39 is critical to stave off further losses.
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Solana’s Raydium DEX displaces Uniswap as a leading activity hub
Solana’s main decentralized exchange, Raydium, has grown in volume in the past months. Recently, Raydium’s activity surpassed Uniswap based on the growing demand for Solana-based assets.
Solana’s Raydium exchange surpassed Uniswap in the short term, printing higher 24-hour trading volumes. It remains to be seen if Raydium holds onto its position based on real Solana activity.
Raydium’s volume reaches $822M in 24 hours, still smaller compared to centralized exchanges. Currently, Uniswap V2 carries around $192M in daily trades, while Uniswap V3 carries $633M. Additional smaller versions of Uniswap add to the total, but Raydium concentrates more trading activity in a single DEX.
Read: The Complete Guide to Crypto Memes: Understanding Meme Coins
Raydium also has unequal days of activity, with usual volumes at around $400M in 24 hours. The biggest driver for Raydium is the on-chain order book, which allows for high-velocity transactions. So far, the Solana network has managed to handle most of the traffic, with a 20-25% transaction failure rate.
Raydium aims to limit dishonest tokens
Activity on Raydium is mainly two types. One type of projects usually aims for social media engagement and sets up high expectations before a listing.
Other types of tokens launch immediate pools with as low as 3-6 SOL. Those tokens rely on automated traders who dive into all new launches with the hope of one token taking off. The occasional hot token or launch also boosts activity. In the case of Raydium, that was Daddy Tate (DADDY), a newly launched asset by the controversial influencer Andrew Tate.
Usually, the first generation of meme tokens like SLERF or BOME make up most of the volume on Raydium. But in the past 3 days, the SOL/DADDY trading pair made up 22% of Raydium’s bot-driven volume. On Raydium, top trading pairs can also shift within a day, so only very few of the meme tokens are active for the longer term.
Raydium tokens also have access to pump bots, as well as exposure bots, which drive activity artificially. Some of the tokens also come from small-scale users trying out Raydium with a minimal liquidity pool. Bot risk is also present, as those pools can be easily attacked and drained.
Raydium users also often resort to buying bots to snag the tokens early after their launch. After that, they also use selling bots to make profits. Raydium is also trying to offer a faster interface, otherwise some of its pairs may not be open to human-based orders.
In June, more sell bots were active on Raydium, surpassing buying by as much as 30%.
Raydium carries 50% of Solana volume
Uniswap currently carries around 50% of all DEX volumes. At the same time, Raydium surpassed all Solana exchanges, carrying 50% of the network’s activity.
The Raydium team is aware of the presence of bots. Based on organic volume alone, Raydium is responsible for 30% of Solana DEX trades.
Raydium is the fourth biggest DeFi protocol on Solana, with more than 900M in total value locked. The token hub displaced even the Jupiter DEX aggregator. The value deposited on Raydium is more than four times that of Orca, the other significant Solana exchange. The activity is helping Raydium mark another successful period after the boom of meme tokens.
Raydium is also the leader with more than 427K daily transactions, compared to around 50K for the Serum DEX.
Remember that not all new trading pairs are active, and Solana’s top memes comprise only a dozen tokens. Most of the pools fail shortly after launch, and some tokens are issued with the sole purpose of rug-pulling.
Also read: Top Meme Coins Send Out Buy Signal as Hype Remains Strong
Raydium also benefits from the overall inflows into the Solana ecosystem. After the bear market of 2022 and 2023, Solana once again drew in more value. Based on all pools and protocols, Solana holds $4.3B in value, still more than 50% down from its total peak in value locked.
However, the RAY native token is yet to reach its level from the 2021 DeFi boom. RAY trades around $1.70, still far from its peak above $16. SOL retreated to $146.14, down from recent levels above $170. SOL is essential to Raydium liquidity pools, where it forms the basis for most new pairs.
Cryptopolitan reporting by Hristina Vasileva
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