$300m of other tokens bridged to Solana in the last week, why?
Over the past week, a significant number of cryptocurrency movements involved the bridging of tokens from various blockchains to Solana, including over $200 million from Ethereum.
This included Ethereum assets (ETH), BNB Channel (BNB), and others, as evidenced by posts on X and web data showing a total of over $300 million, according to data from deBridge Finance.
Based on the total value locked, bridge tokens allow you to lock an original token on a native blockchain and then create or unlock an equivalent token on Solana (GROUND). Often referred to as “wrapped” tokens, for example wETH for Ethereum on Solana, bridging allows interoperability between different blockchains.
One reason for increased activity may be diversification, with alternative strategies and/or applications not limited to the confines of a blockchain.
In the case of the recent influx of tokens into Solana, this could include recent speed updates that increase block limits, the advent of 120 millisecond block times, as well as some feature upgrades that make blockchain attractive to investors.
Besides speed and efficiency, lower transaction fees on Solana compared to Ethereum could be behind this increase. Additionally, investors may be attracted to Solana’s DeFi staking and yield ecosystem, which offers more attractive yields compared to similar opportunities on Ethereum.
Unlike Ethereum, Solana uses a combination of proof-of-stake and proof-of-history, enabling high transactions throughout.
Staking on Solana can earn around 7% APR, higher than Ethereum due to its inflation rate and lower total staked supply. Additionally, Solana’s native staking is less liquid than post-Shanghai Ethereum, but liquid staking protocols like Financing marinades or Jito provide liquidity via tokens like mSOL or JitoSOL.
In summary, while Solana’s significantly lower fees make yield farming more viable for smaller investors compared to Ethereum, where high gas fees can eat into profits, other investors may gravitate more towards Ethereum by due to volatility and its battle-tested protocols, as well as Ethereum’s higher fees. smart contracts and dApps established.
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