Orca: Breaching in Rough Seas

Solana DEX Landscape

Orca was the dominant DEX on Solana throughout 2022-23, consistently registering over 50% of the chain's total DEX volume. From November 2023, however, Raydium began gaining ground on Orca, quickly surpassing its position as the top Solana DEX. A key growth driver for Raydium was its ability to capitalize on the memecoin mania, first via its frontend and then becoming the liquidity backend for popular memecoin products like Pumpdotfun and Telegram trading bots. From less than $5M in memecoin volume in October 2023, Raydium surpassed $100M of memecoin volume in November, $1B in December, and peaked at almost $20B in March 2024. This explosive growth also benefited SOL volumes on Raydium, as the vast majority of memecoin pools use SOL as the trading pair. Below, we show the monthly volume breakdown by token type on Raydium.

While Raydium’s growth is impressive and should not be discredited, onchain data suggests that Orca’s fundamentals remain strong and on the rise. Orca's weekly market share of Solana DEX trading volume bottomed at 15.4% in June – right around the time Orca v2 launched – and is now up almost 2X, at 26.5%. From another perspective, Raydium's market share peaked at 62% in June and is now at 44%. Despite Orca consistently registering about 65% of Raydium's volume for the past 30 days, ORCA sits at 22% of RAY's fully diluted valuation ($175M vs. $809M). Below, we show Solana's DEX volume market share over time. 

Notably, Orca v2 Token Extensions (previously Token-2022) data isn't readily available, so we are omitting some portion of Orca's trading volume. This omission is relevant as PayPal chose Orca as its go-to-market DEX partner for PYUSD, which leverages said standard. As a lower bound estimate of the missing data, Kamino PYUSD liquidity vaults – all depositing to Orca – have registered $274M in trading volume over the past 30 days. As such, Orca's market share is a bit higher than the figure provided above. 

Capital Efficiency