Glassnode Exposes $224 Billion Solana Surge; VanEck Cites 14% Revenue from Wash Trading

Glassnode recently reported a massive surge in on-chain transfer volume in the Solana blockchain, peaking at around US$224B (AU$341B) — that’s around 3 times Solana’s entire market cap, which is currently at US$76B (AU$115B).

According to Glassnode, the surge was driven by a high-activity wallet using multiple accounts:

This surge was driven by a high-activity wallet using multiple accounts. This wallet, likely an arbitrage bot, ramped up activity in early October and was likely responsible for the recent fee increases many were discussing.

Glassnode

Related: VanEck Introduces Staking to European Solana ETN, Offering Investors Lucrative Rewards

And yes, Solana’s fees have increased considerably in the last 30 days. The network’s average transaction fee has more than doubled recently, reaching around US$0.06580 (AU$0.1003) as of early November 2024. 

Are Solana Metrics Trustworthy?

Investment giant VanEck recently released an in-depth report about Solana’s recent performance, attributing its high user engagement and transaction volume to its cost-efficient, high-speed infrastructure. However, Despite these strengths, much of Solana’s activity stems from speculative trading, particularly within memecoins.

The firm’s report highlights that approximately 14.2% of Solana’s revenue is linked to wash trading — the practice of repetitive asset transactions to inflate volume figures. By contrast, Ethereum’s wash trading accounts for only about 2% of its revenue. 

While the rise in fees signals increased network usage, it also raises questions about the long-term sustainability of Solana’s growth, because a significant portion of activity comes from speculative trading and bot manipulation means Solana may face volatility and doubts about the authenticity of its reported metrics.

Many critics have suggested that Solana’s reported figures in the last couple of months may be artificially inflated due to wash trading in memecoins, leading to skepticism over the network’s real growth trajectory.

Related: VanEck Report Claims Solana Undervalued, Can Reach 50% of Ethereum’s Market Value

So, in light of Solana’s speculative revenue nature, VanEck has included expanded risk disclosures in its Solana exchange-traded product (ETP) offering. These disclosures detail potential market risks, including wash trading and the influence of large SOL holders, ensuring transparency for investors.