$300m of other tokens bridged to Solana in the last week, why?

The past week has featured significant cryptocurrency movement of tokens bridged from various blockchains to Solana, including Ethereum worth more than $200 million.

This included assets from Ethereum (ETH), BNB Chain (BNB) and others, as evidenced by posts on X and web data that point to a total of over $300 million, according to data from DeBridge Finance.

Based on aggregate value locking, bridge tokens allow an original token to be locked on a local blockchain, followed by minting or unlocking an equivalent token on Solana (SOL). Bridging so-called “wrapped” tokens, such as wETH for Ethereum on Solana, allows for interoperability between different blockchains.

One reason for the increased activity may be due to the diversity, alternative strategies, and/or applications not being limited by the limitations of a single blockchain.

In the case of a recent influx of tokens into Solana, this could include some recent speed updates that raise block limits, the introduction of 120-millisecond block times, as well as some feature upgrades that make the blockchain attractive to investors.

Apart from speed and efficiency, lower transaction fees on Solana compared to Ethereum could be the reason for this rise. Additionally, investors may be intrigued by Solana’s DeFi staking and yield ecosystem, which offers more attractive returns compared to similar opportunities on Ethereum.

Unlike Ethereum, Solana enables highly end-to-end transactions using a combination of Proof of Stake and Proof of History.

Staking on Solana can provide annual returns of around 7%, higher than Ethereum due to the inflation rate and lower total staking supply. Moreover, Solana’s native staking is less liquid than Ethereum’s post-Shanghai, but liquid staking protocols such as Marinade Finance or Jito provide liquidity through tokens such as mSOL or JitoSOL.

In summary, Solana’s significantly lower fees make yield farming more affordable for small investors compared to Ethereum, where high gas fees can eat into profits, while other investors are more into Ethereum due to volatility and battle-tested protocols, and Ethereum’s more It can be too directional. built smart contracts and dApps.