Solana has 100M active wallets, but most are empty
Solana has recently seen its monthly active address count surpass 100 million, reaching an all-time high, according to data from Artemis Terminal. This marks a significant increase from just 509,000 monthly active addresses at the beginning of 2024. However, despite the impressive numbers, most active wallets do not hold any Solana (SOL), leading some skeptics to believe that this growth is being driven by bots that inflate the metrics.
Data from Hello Moon reveals that over 86 million users held zero SOL in their wallets over the past month. Additionally, around 15.5 million users had less than 1 SOL, and approximately 1.5 million had less than 10 SOL. Justin d’Anethan, head of APAC business development at Keyrock, commented that many Solana addresses have a low lifetime value, suggesting that the activity may not be entirely legitimate.
Dan Hughes, founder of decentralized finance platform Radix DLT, pointed out that many of these zero-balance accounts might be interacting with centralized exchanges (CEX) or decentralized finance (DeFi) applications. He explained that when users send tokens to a CEX, the exchange generates a proxy address that records transactions on the backend.
Despite the concerns about the legitimacy of Solana’s metrics, the network has been experiencing a resurgence in the issuance of new tokens and new account creation. Since September 26, Solana has seen at least 17,000 new tokens created daily, and on October 8, over 10 million new accounts were established, more than double the number from the previous day.
Critics of Solana have raised concerns about bots artificially inflating the network’s user activity. Hughes noted that it’s relatively easy to create the appearance of many active users on Solana by transferring funds between addresses. Austin Federa, head of strategy at the Solana Foundation, acknowledged that while bot transactions have lower economic value, they still contribute to network activity, highlighting Solana’s capacity to support a diverse range of interactions that may not be viable on other blockchains like Ethereum.
On the financial side, Solana has been gaining traction in decentralized finance (DeFi), with a total value locked (TVL) of $5.41 billion, making it the third-largest blockchain for DeFi as of October 9. Comparatively, Ethereum leads with a TVL of $44.7 billion, followed by Tron at $7.4 billion.
The efficiency of Solana’s blockchain, with its low transaction fees and high throughput, has created an environment that attracts bots, which can inflate activity levels. However, these bots do pay transaction fees, contributing to the network’s revenue and supporting its long-term inflation management strategy. With rising activity and an increase in active wallets, Solana has seen a recovery in its revenue from transaction fees.