Solana's Surpassing of Ethereum in DEX Volume: Network Scalability and Liquidity Dynamics as Key Drivers of DeFi Migration

In Q3 2025, Solana's decentralized exchange (DEX) volume surged past Ethereum's for the first time, marking a pivotal shift in the DeFi landscape. According to a Messari report, Solana recorded $117.1 billion in DEX volume during the quarter, outpacing Ethereum's $105.3 billion. This trend, which began in Q2, reflects a broader migration of DeFi activity to Solana, driven by its superior network scalability and liquidity dynamics.

Network Scalability: The Foundation of Solana's DEX Dominance

Solana's ability to process 4,700 transactions per second (TPS) with block confirmation times of 400–600 milliseconds, according to an AntiEr Solutions analysis, has made it a magnet for high-frequency trading and institutional activity. By contrast, Ethereum's base-layer throughput remains constrained at 10–15 TPS, forcing reliance on Layer-2 solutions like Optimism and Arbitrum to achieve scalability, as reported in a MarketMinute article. While Ethereum's post-Merge infrastructure prioritizes security and decentralization, Solana's monolithic design-leveraging innovations like Proof-of-History and parallelized transaction processing-enables direct Layer-1 scalability, as noted in The Currency Analytics.

Transaction cost economics further amplify this divide. Ethereum's average fee of $0.50 per transaction, with spikes exceeding $100 during congestion, is documented in an Ecoinimist report, and contrasts sharply with Solana's near-zero fees (averaging $0.00025 per transaction), as reported in a Supra guide. Supra notes that Solana's low fees reduce slippage and operational costs, making it ideal for micro-transactions and real-time DeFi applications, a point echoed in a Benzinga article.

Liquidity Dynamics: AMM Efficiency and Capital Inflows

Data from Analytics Insight reveals that Solana's DEXs achieved a 24-hour volume spike of $3.8 billion in January 2025, surpassing Ethereum ($1.7 billion) and Base ($1.2 billion) combined. This liquidity depth is further bolstered by Solana's growing institutional adoption, including ETF inflows and protocol upgrades like Alpenglow, which enhance transaction speed, as reported in a Currency Analytics report.

Ethereum, despite retaining a larger TVL ($66 billion vs. Solana's $5.7 billion, according to CryptoNewsRadar), faces challenges in sustaining liquidity for high-velocity use cases. While Ethereum's Layer-2 ecosystem (e.g., Arbitrum, Starknet) mitigates some bottlenecks, its reliance on off-chain infrastructure introduces latency and complexity. Meanwhile, Solana's direct Layer-1 scalability-bolstered by innovations like Firedancer and ZK Compression-enables it to process up to 65,000 TPS, per an Nftenex article, a throughput level that Ethereum's EIP-4844 roadmap aims to match by late 2025, according to a CoinLineUp article.

Capital Inflows and Institutional Clout

The migration of capital into Solana's DeFi ecosystem has been staggering. Whale investors injected over $1 billion into Solana's DEXs in Q3 2025, driving a 500% surge in network transactions. Ultra-low fees (averaging $0.005 per transaction) and institutional-grade infrastructure have made Solana a preferred hub for real-world asset (RWA) tokenization and gaming-based DeFi projects. In contrast, Ethereum has seen mixed trends, with nearly 20,000 ETH outflows onto exchanges in Q3 2025, signaling profit-taking or risk aversion.

While Ethereum's $219 billion capital inflow in 2025 underscores its enduring institutional appeal, Solana's agility in capturing niche markets-such as NFTs and high-frequency trading-has reshaped the DeFi value proposition. As noted by Analytics Insight, Solana's ecosystem now boasts $1.21 trillion in annual DEX volume, eclipsing both Ethereum ($400 billion) and BNB Chain ($761 billion).

Conclusion: A New Era for DeFi

Solana's surpassing of Ethereum in DEX volume is not a fluke but a symptom of structural advantages in scalability and liquidity. For investors, this signals a shift in DeFi's center of gravity toward platforms that prioritize speed, affordability, and institutional-grade infrastructure. While Ethereum remains the bedrock of long-term DeFi innovation, Solana's execution on performance metrics has made it the go-to chain for cost-sensitive, high-velocity applications. As the DeFi revival of 2025 unfolds, the interplay between these two ecosystems will define the next phase of blockchain adoption.