VanEck’s proposed spot Solana (SOL) exchange-traded fund (ETF) is facing scrutiny due to concerns over wash trading and the nature of on-chain activity. Matthew Sigel, Head of Digital Assets Research at VanEck, published an in-depth analysis on Tuesday, comparing SOL’s metrics with those of Ethereum to provide context and clarity.
Solana has been recognized for its high throughput and low transaction costs, attracting a significant number of users and developers. With approximately 111 million monthly active wallets, it vastly surpasses Ethereum’s 5.4 million. However, skeptics argue that a large portion of these wallets may be Sybil accounts—fake identities created to manipulate metrics.
Does Solana Have A Wash Trading Problem?
In his analysis, Sigel acknowledges the challenge in distinguishing between organic user activity and that stemming from single users controlling multiple wallets. “We do agree that a very large portion of these wallets are not organic,” he states.
The analysis reveals that memecoin and non-fungible token (NFT) activities constitute a significant portion of Solana’s revenue. Approximately 34.3% of Solana’s revenues are derived from these sources, compared to 6.6% for Ethereum in the current year and 20.3% for Ethereum during its peak memecoin activity between July and October 2021.
When assessing wash trading—a practice where traders buy and sell the same asset to artificially inflate volumes—Solana’s figures are notably higher. An estimated 41.4% of memecoin and NFT volume on Solana is attributed to wash trading. In contrast, Ethereum’s wash trading for these assets stands at 28.9% in 2024 and was 44.4% during its 2021 peak.
“Putting it together, we assess that 14.2% of Solana revenues come directly from wash trading compared to 2% for Ethereum in 2024 and 9% in mid-2021,” Sigel notes. He adds a crucial caveat: the analysis assumes that memecoin wash trading generates miner extractable value (MEV) in line with normal trading. Without MEV on these trades, the estimates would fall by 50%.
To conduct this analysis, the study utilized Dune Analytics queries of both Solana and Ethereum blockchains to accumulate memecoin and NFT activity over
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Author: Jake Simmons
