The Solana blockchain has recently seen its onchain transfer volume hit record highs, with the number of total active addresses spiking to 22 million and the SOL transfer volume reaching an all-time high of $318 billion. However, market intelligence firm Glassnode claims that most of this activity is conducted by bots.
Glassnode’s Findings
In a recent post on X, Glassnode noted that Solana’s SOL transfer volume hit an all-time high of $318 billion on Nov. 16, which is almost three times the total market capitalization of SOL, currently at around $112.5 billion. The number of total active addresses on Solana had spiked to 22 million.
However, Glassnode also noted that the mean and median transaction volumes dipped around the same time, raising questions about the veracity of Solana metrics. If the growth is organic, it should be accompanied by a similar uptick in the averages.
In an attempt to explain this phenomenon, Glassnode said: "This pattern of network activity inflation may be indicative of bot-driven activity, which has historically contributed to similar trends on Solana."
Bot-Driven Activity
The ramped-up activity was likely responsible for recent increases in fees and network revenue. Solana daily revenue hit a record high of almost $6 million on Nov. 20, with network participants paying $7.63 million in transaction fees, according to data from DefiLlama.
Solana revenue and fees have been increasing steadily over the past few weeks, but Glassnode’s findings suggest that most of this activity may be bot-driven.
Raydium’s Liquidity Pools
Additional data from Blockworks Research reveals that Solana achieved an all-time high of $26 million in real economic value (REV) on Nov. 19. The layer-1 network also clocked the highest-ever decentralized exchange (DEX) volume of $6.93 billion, with Raydium representing 74% of Solana’s DEX trading volume with $5.13 billion, on Nov. 19.
However, a closer analysis of Raydium’s liquidity pools reveals that countless liquidity pools on this protocol have little to no liquidity and generate unreal trading volumes. For example, the SOL-HAT pool held just $7 in liquidity but had almost $400,000 in 24-hour trading volume.
This suggests that bots and other inorganic trading activities may drive a big chunk of Solana’s transaction volume.
Not the First Time
This is not the only time Glassnode has claimed the presence of inorganic activity on Solana. On Nov. 4, the firm asserted that a "massive spike in onchain transfer volume" on Solana was "driven by a high-activity wallet using multiple accounts."
Similarly, Cointelegraph previously reported on claims by pseudonymous researcher Flip Research that most of the activity on Solana was conducted by bots.
Critics’ Views
Critics have suggested that reported figures of Solana’s network activity in the last couple of months may be artificially inflated due to wash trading in memecoins, leading to skepticism over the network’s real growth trajectory.
Investor Interest Remains High
Nevertheless, the recent spike in Solana’s network activity continues to spark investor interest as traders remain optimistic about Solana’s SOL prospects. Pseudonymous analyst Titan of Crypto says SOL could possibly hit the $400 mark as it appears ready to break out of a cup-and-handle pattern.
Veteran trader Peter Brandt shared similar sentiments, saying Solana’s upward swing over the last few weeks is likely to drive its price further higher, setting the short-term target at around $275. "Oftentimes, the price moves in swings, where the swings are relatively equal in price," he said. "I am sure Elliott traders get quite precise (as they tend to do), but I just use swing targets as a guide."
Solana’s Recent Performance
Solana’s recent performance could be only the beginning of a bigger bull market cycle. Its price was up 15% over the last seven days and 43% over the last month to trade at $238 at the time of publication.
This uptick saw its market cap reach an all-time high of $117.8 billion on Nov. 18, cementing its position as the fourth-largest cryptocurrency by market value.
Conclusion
While Solana’s recent performance is impressive, it is essential to consider Glassnode’s findings and the potential for inorganic activity on the network. As with any investment decision, readers should conduct their own research and carefully evaluate the risks involved before making a decision.
