Solana DEXs book record volumes following airdrops

Solana is narrowing its gap with Ethereum in DeFi volume, and hundreds of millions in airdropped tokens may have helped


Kolonko/Shutterstock modified by Blockworks


As Solana continues its price run, activity is picking up on the network’s DeFi protocols. 

Liquidity on Solana’s largest decentralized exchanges has grown tenfold since Oct. 17, according to a Dune Analytics dashboard. DeFiLlama data shows December DEX volume on Solana beating the previous monthly high, set in November, by almost triple. The volume growth came on the heels of two large airdrops in Solana DeFi, while a third airdrop looms.

Since DeFi caught on in force during 2021, Solana’s decentralized exchanges (DEXs) booked marginal volumes in comparison to DeFi’s main hub, Ethereum. The discrepancy worsened after Solana backer Sam Bankman-Fried was outed for fraud in late 2022. 

Solana’s DeFi ecosystem narrowed the gap with Ethereum considerably in December. During certain week-long periods this month, Solana’s DEXs booked more volume than Ethereum’s. In the past seven days, Solana DEX volume increased 26% to roughly $5.8 billion. This is compared to $8.5 billion on Ethereum DEXs, which saw roughly the same volume as the week before, per DeFiLlama. 

The DEX revival came on the heels of sizable token airdrops from Solana DeFi protocols Pyth and Jito. In late November, the oracle network Pyth airdropped its users tokens worth roughly $87 million at current prices, and Solana’s second-largest liquid staking protocol Jito followed by distributing JTO tokens amounting to roughly $228 million today. 

Some liken airdrops to DeFi network stimulus checks, but this framing depends on who is actually on the receiving end of the free tokens. Jito said sybil abusers, or single users posing as many different users to receive more than their share, presented a major challenge to its airdrop. Its final allocation made use of anti-sybil measures. 

As for the assets that are being moved around on-chain, a majority of Solana’s recent DEX trading volume appeared to route through the network’s Jupiter aggregator, which gathers liquidity in hopes of optimizing prices with minimal slippage. Jupiter announced in November it would soon be launching a token of its own, with 40% being airdropped to the community. 

Airdrops being an ingredient in a DeFi ecosystem growth recipe is not new in DeFi. Ethereum’s DEX volumes increased in five of the six months following a September 2020 airdrop from Uniswap, the network’s largest DeFi protocol. 

Liquid staking appeared to slow down on Solana during the growth in DEX interest. A Dune Analytics dashboard shows the total amount of Solana staked shrunk by more than 2 million solana in the past week. 

Jito has seen five straight days of cumulative outflows, per DeFiLlama.

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