Most of the new active addresses on Solana are driven by Jupiter, a DEX aggregator on Solana, which will undergo one of the most anticipated airdrops on January 31, 2024.
Author: JON MA, Artemis CEO
Translated by: TechFlow
Introduction
On January 26, 2024, the number of daily active addresses on Solana exceeded 1 million, a figure that last appeared in mid-December 2023. This has sparked discussions about the factors driving the growth in Solana user activity. This article will analyze the activities on Solana that occurred on January 26, 2024, and explore the applications and users driving this growth.
Main Body
On January 26, 2024, the number of daily active addresses on Solana exceeded 1 million.
According to Coingecko's data, the last time Solana recorded over 1 million daily active addresses was between December 15 and 17, 2023, which coincided with the peak and decline of $BONK prices.
This raises a question: what drove the user activity on Solana on January 26, 2024? Which applications or users contributed to the growth of active addresses?
In this article, we attempt to answer these questions. We have built an Activity Monitor to help analysts understand what is driving on-chain activities. If we observe an increase in activities (such as fees, daily transactions, or daily active addresses) on networks like Ethereum, Polygon, and Solana, can we use this tool to better understand which applications or users are driving the usage of the chain?
In today's article, we use the Activity Monitor to better understand what happened on Solana on January 26, 2024. Overall, the increase in active addresses was driven by the $WEN airdrop. $WEN is a community token on Solana distributed to wallets that have exchanged over $5 on Jupiter, Ovols NFT holders, blue-chip NFT holders, or Genesis Saga holders.
Which applications and users are driving the growth of Solana users?
Using the Activity Monitor, we see that in the past 24 hours, DeFi and token transfers have driven a significant increase in active addresses: DeFi users increased from 178,000 on Thursday, January 25, to 400,000 on Friday, January 26. Similarly, active addresses for token transfers increased from about 55,000 on Thursday to 167,000 on Friday.
It is worth noting that on January 26, 2024, 37% of the daily active addresses on Solana are new, which could be new wallets and new users joining Solana, or possibly new wallets and addresses created by bots to take advantage of the Jupiter or $WEN airdrop.
What application is driving the majority of new active addresses? By looking at the table of applications below, we find that it is Jupiter—a DEX aggregator on Solana, which will undergo one of the most anticipated airdrops on January 31, 2024.
We see that over 520,000 active addresses interact with Jupiter's smart contracts, with the majority being existing users (62%) and new users (38%).
It is worth noting that the average gas consumption per user on Jupiter (total gas fees paid on Jupiter / total daily active addresses on Jupiter) is approximately $0.3, compared to $0.49 on Solana overall. Using Ethereum as a benchmark, the average gas consumption per user is $13.55. Solana's lower gas fees make it easier to conduct more transactions on the chain.
Why is there more activity on Jupiter?
In short, this is due to the anticipation of the $WEN airdrop and the $JUP airdrop.
Background
- According to Stepn Finance's data, during the airdrop period, over 117,000 addresses were active at the same time
Due to the significant activity surrounding the WEN airdrop, Phantom experienced some performance issues
On Jupiter, there was a significant amount of exchange between SOL-USDC (527 million in trading volume) yesterday, and the trading volume between WEN and SOL and USDC was approximately $48 million.
Our speculation on what is driving the token transfer volume (transfers unrelated to SOL, hence considered transfers between wallets/smart contracts for $WEN) and exchanges on Jupiter is:
Investors looking to buy (or sell) $WEN on Jupiter: Given the price increase of $WIF and $BONK, investors may want to prepare for another Meme's price increase.
Those aiming to receive the $WEN airdrop and Jupiter airdrop: However, it is worth noting that the actions taken on January 26, 2024, do not affect the eligibility for both token airdrops:
The eligibility for the $WEN airdrop requires exchanging at least $5 in the past 6 months, up to January 19, 2024, so any actions taken after January 19 will not affect the eligibility or amount of the airdrop, as it is distributed evenly to each eligible wallet. (Source: https://lfg.jup.ag/wen)
The eligibility for the $JUP airdrop requires taking action before November 2, 2023, so any actions taken after this date will not affect the eligibility for the airdrop.
Conclusion
Both investors and protocols have a question of which set of applications will ultimately drive the next wave of crypto user growth.
Phantom shared in its 2023 Year in Review that within 3 months after Breakpoint, from September to December 2023, the app was installed over 600,000 times, which also coincides with the rise in Solana's price, the conclusion of the FTX trial, and the JTO airdrop.
As seen in the growth of new active addresses in mid-December 2023 and on January 26, 2024, it seems that Memes like $WIF, $BONK, $WEN, and the anticipation of airdrops have clearly played a significant role in attracting new users.
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