Solana Network Activity Reportedly Peaks During US Hours, SOL Trading Activity Accounts for 75% of Successful Transaction Fees

Solana (SOL) network activity typically peaks during US hours, though it appears to be “skewed” more towards Pacific Coast time zones when compared to Bitcoin (BTC) and Ethereum (ETH), according to an in-depth analysis from Coinbase Institutional.

The research report noted that the concentration of fee spending on Solana is in line or consistent with other low fee networks, with the “top 0.13% of users contributing 90% of non-vote transaction fees.”

The report also noted that trading-linked activity regularly “accounts for 75-90% of Solana successful transaction fees, higher than Ethereum’s 55-65%.”

David Han, Institutional Research Analyst, explained in the extensive report that Solana’s “unique” transaction format and large blockchain history can pose challenges for analysis, which has “previously led to some concerns over some of its network metrics.”

David Han also mentioned that indeed, Solana’s differences prevent the direct application of adoption metrics they’ve previously utilized for chains that are said to be compatible with the Ethereum virtual machine (EVM).

That said, the report pointed out that they find that Solana’s network metrics are broadly similar to “other low fee chains according to an alternative set of activity distribution analysis.”

The report released by Coinbase Institutional explained that Solana fee spending surges during US hours, “mostly in line with activity patterns we’ve previously observed in both centralized and decentralized exchanges.”

The research study from Coinbase further noted that Solana’s peak activity timing is skewed “later in the day towards Pacific Time Zone hours, suggesting it may have a distinct cohort of active users compared to other networks.”

Separately, 26% percent of Solana transaction fees in 3Q24 are “spent on failing transactions, down significantly from a peak of 55% in March.”

Although still higher than other low cost chains like Base, an Ethereum L2 incubated within Coinbase, (which averaged 14% over 3Q24), the “fees spent on failed transactions is moving closer towards its peers’ ranges.”

The concentration of active users also “appears in line with competitors. 0.13% of accounts on Solana are responsible for 90% of total non-vote fee spend.”

The research study also noted that much of this spend is “linked to DEX activity, with 75-90% of total Solana fees spent on DEX trades.”

This is higher than Ethereum and Base DEX activity, which “account for 55-65% and 60-70% of their fees, respectively.”

The analysts think this may be driven “by its larger ecosystem of memecoins, though its burgeoning gaming and DePIN ecosystem could help diversify its fee demand drivers in the long term.”

The research study also stated that Solana transactions have “a major difference from Ethereum and other EVM transactions that prevents a direct comparison via our existing adoption measurement heuristics – they lack a singular clear recipient address.”

Among other things, ETH transactions contain “a sender address (“from”), a recipient address (“to”), and a data payload (which is then executed by the recipient address if applicable).”

Although the recipient address may in turn call other addresses to execute additional actions, the consistency of behaviors across Ethereum Virtual Machine systems makes metrics like “the h-index or recipient distribution ratio comparable between EVM chains.”

Meanwhile, Solana’s transaction format also contains a sender address (“signer”), which is effectively equivalent to the “from” field in the EVM. But the similarities “largely end” there.

Instead of a recipient address, Solana transactions contain a list of instructions, each containing an “executing account” with an associated data payload.”

The report added that throughout 3Q24, Bitcoin and Ethereum fees reached their average peak “at 1pm and 2pm UTC respectively (9am and 10am ET), while Solana fees peaked at 8pm UTC (4pm ET or 1pm PT).”

According to the report, this is a fairly intriguing time-zone to peak in, “as there is no major economic zone beyond the US West Coast that enters the market at or immediately after 8pm UTC (just the Pacific Ocean).”

This suggests to the crypto market analysts that a “significant portion of high value transactions could be US-based, potentially with a large user base skewed towards the Pacific region.”

For reference, the update noted that Base reportedly “peaks at 10am ET (similar to Ethereum), while both Arbitrum and Polygon PoS peak at 9am HKT, suggesting they have a stronger Asia footprint.”

The Coinbase Institutional analysts concluded that Solana’s onchain activity drivers are “still heavily concentrated on DEX activity.”

In their view, this could lead to “an outsized impact on network fee revenue in the event of a market downturn (and an associated reduction in trading activity).”

Furthermore, its activity concentration “towards the Pacific Time Zone suggests that there may be less coupling between Solana and traditional financial markets and hours (e.g. in New York or Hong Kong) compared to networks like Ethereum or Bitcoin.”



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