With transaction fees getting out of control once again, only whales are able to trade tokens on Ethereum as of late. Plebs are starting to ask again, what is the solution to these ridiculously high fees?
Ethereum layer 2s are one solution to the problem, since they offload transactions from the mainnet to other blockchains. However, they are not very user-friendly, and still require interacting with the mainnet whenever migrating tokens.
Another solution to the scalability problem is to re-engineer everything from the ground-up, like what Solana did. Despite the numerous outages Solana suffered throughout 2022 and 2023, its trading volumes have surpassed that of Ethereum multiple times, so it may be worth familiarizing yourself with how to trade on it.
Especially these days, with the most recent meme coin frenzy, a lot of trading volume has moved from Ethereum decentralized exchanges over to those on Solana.
A decentralized exchange (DEX) allows investors to permissionlessly trade tokens on a blockchain, without the need of a trusted third-party. The entire transaction is handled by smart contracts, and the user never loses custody of their funds, so long as there are no bugs in the contract's code. Bancor and Uniswap were two of the first DEXes built on Ethereum.
Similar to Ethereum, a number of DEXes have been launched on Solana. Each one can be used to trade SPL tokens, the native token standard of Solana. Some of the original Solana DEXes include Serum, Raydium and Bonfido. In more recent years DEXes like Orca and Jupiter have been launched with great success.
Perhaps there's a new SPL token that has captured your attention (memecoin, or otherwise), and you would like to add it to your portfolio. Some of the DEXes mentioned above may list the particular token you're interested in, while others will not. You can check the DEXes that a specific token is available on by looking at the Markets section of its Coingecko page.
For example, let's say we are interesting in the DePIN token Helium (HNT). First, we head over to the token's page on Coingecko, and from the Markets tab we can see that the token is available on the Orca DEX, after sorting by 24 hour trading volume.
If the token isn't listed on Coingecko, you could also try searching for it on Coinmarketcap to find out which DEXes it is listed on.
One of the most popular Solana wallets, Phantom, also has a built-in swapping function, which you can use to convert one SPL token to another from directly within the app. Not all tokens are supported though, so you may need to dig a little deeper in the sites mentioned above if it isn't supported.
By the way, there now are also cross-chain decentralized exchanges, which allow you to trade tokens between completely separate blockchains in a permissionless, decentralized way. Platforms like Thorchain and Maya Protocol have made this possible.
Conclusion
With transaction fees skyrocketing once again, every day users are looking for cheaper alternatives to trading tokens on Ethereum. Solana is popular alternative these days, thanks to the most recent meme coin frenzy, but is also home to several DePIN tokens which have potential for sustainable, long-term growth. Sites like Coingecko and Coinmarketcap can be used to find out which DEX these Solana tokens are listed on.
If you learned something in this post, be sure to read my other articles about finance and crypto here on the HIVE blockchain. You can also follow me on InLeo for more frequent updates.
Until next time...
Resources
Ethereum tx fees tweet [1]
Solana Orca logo [2]
Coingecko info on Helium [3]
Yeah. The Txn fees in both Bitcoin Ethereum Blockchain has gone 5x, not a cup of tea for common average minnow size people.
I generally use Phhantom.
It's really an informative article, thank you so much.