Solana DEX volume tumbles: Could SOL be in trouble?

The trading volume on Solana's decentralized exchanges has significantly dropped from over $1.5 billion to $984 million recently, signaling a potential decline in interest for Solana-based memecoins. This downturn follows a record high in April when the monthly volume reached $60 billion. The decrease in memecoin trading, which often requires SOL for transactions, could further drive down SOL's price. Currently, SOL is trading at $161.49, down from a near $190 high, and could potentially test lower support levels if the trend continues. Additionally, Solana's open interest has also decreased, suggesting reduced market strength and liquidity, which could lead to further declines in SOL’s value.

Solana has been facing competition from emerging blockchains like Aptos and Sui. These projects have shown high transaction volumes and are gaining traction in the blockchain space. Aptos, for example, surpassed Solana by recording an astounding 115.4 million transactions on May 25, compared to Solana's 31.7 million. This surge in transaction volume not only set a new benchmark but also exceeded the previous record held by Sui Network by an impressive margin of over 50%.

Aptos and Sui both utilize the Move programming language, which is a Rust-based language designed for blockchain development. Sui's version of Move is slightly modified compared to Aptos, which uses a version closer to the original iteration. The use of Move allows for improved security by preventing issues such as vulnerabilities and ensuring data abstraction, resulting in cleaner code structures and reduced risk of human error.

In terms of consensus protocols, Sui only runs consensus as needed to checkpoint its state regularly and for transactions that require a total ordering. Aptos, on the other hand, is running on the fourth iteration of their consensus protocol, Aptos BFT, which they claim is the lowest latency and most advanced iteration to date. The consensus protocol is a derivative of HotStuff, the underlying consensus protocol initially used at Diem.

While it's uncertain if these projects will be able to consistently outpace Solana transactions, they are currently showing strong performance and gaining significant attention within the blockchain industry.