Michael Nadeau, founder of The DeFi Report, noted that while a significant amount of value previously exiting Ethereum flowed to layer 2 solutions, a considerable portion has returned to the layer-1 blockchain itself.
According to Nadeau, although Solana has seen inflows from other blockchains, a substantial part of that value has been redirected back to Ethereum. He emphasized on X that for Solana to thrive, it must attract total value locked (TVL) away from Ethereum and its layer-2 networks. “That’s where all the value sits today. Is it happening? Not really,” he remarked.
Data from crypto analytics platform Artemis reveals that year-to-date (YTD), Solana has lost approximately $55 million in TVL to layer-2 solutions like Base, Optimism, and Arbitrum.
Nadeau highlighted that, despite Solana receiving $2.36 billion in inflows from Ethereum this year, over $1 billion—42% of the total—has flowed back to Ethereum. He also pointed out that the outflow from Ethereum to Solana has been modest, representing only 2.7% of Solana’s TVL.
As of now, data provider DefiLlama shows Ethereum boasting more than $50 billion in TVL. Nadeau noted that while Ethereum has experienced $6 billion in net outflows YTD, 83% of those assets have migrated to layer-2 chains still within Ethereum’s ecosystem. This dynamic suggests that the value leaving Ethereum will continue to support its layer-1 network.
In related news, Solana recently surpassed Ethereum in daily transaction fees. On October 28, Solana generated over $2.54 million in fees, outpacing Ethereum’s $2.07 million and making it the fifth-largest fee-generating protocol that day. This surge in fees was attributed to increased activity on Raydium, a decentralized exchange (DEX) operating on Solana.
