- Solana meme coin activity, a major revenue driver, has fallen sharply, with decentralized application (DApp) revenue plummeting 86% to $32 million.
- Meme coin market capitalization plunged 68% from its peak, and Solana’s native token SOL has dropped 58% from its all-time high, trading at $122.
Solana has seen its on-chain revenue plummet in recent months as the meme coin mania that drove its expansion loses steam. Weekly network revenue, which reached a record high of $55.3 million in mid-January, has now slipped to a mere $4 million, its lowest figure since September.
Solana Revenue Sees Major Decline
The revenue decline is part of a wider slowdown in meme coin minting, which had earlier been a large contributor to Solana’s activity. Decentralized applications (DApps) on the network collectively generated $238 million in revenue, as highlighted in our previous article. Now, according to DeFiLlama, it has dropped by 86% to just $32 million last week.
Additionally, Solana’s decentralized finance (DeFi) industry has also seen a sharp contraction. The overall value locked (TVL) on Solana-based DeFi platforms has come close to being halved, from $12 billion to around $6.4 billion.
This steep fall coincides with a sharp decline in meme coin trading activity. A March 5 report from investment company VanEck pointed out that meme coin trading accounted for close to 80% of Solana’s total revenue at its peak.
One of the leading platforms fueling the hype, Pump. Fun, earned $15 million in daily revenue during the mania in late January. Yet, according to Dune Analytics data, its revenue declined by 95% to $800,000 on March 7.
Meme Coin Market Collapse Triggers SOL’s Decline
The meme coin frenzy reached its peak activity in mid-January after former U.S. President Donald Trump’s TRUMP token went live on January 18 and Melania Trump’s MELANIA token on January 20. These launches created enormous hype, bringing liquidity from other crypto assets, but the buzz didn’t last long. TRUMP has fallen 86% since its all-time high. The meme coin market capitalization also plunged 68% from a December peak of $137 billion to $44 billion.
The decline in meme coin activity has also had an effect on Solana’s native token SOL. Following its all-time high at $293 in mid-January, SOL lost 58% of its value and was trading at $122 at the time of writing.
As a response, the Solana community is engaged in a discussion regarding a proposal to alter the tokenomics. The governance proposal, titled Solana Improvement Document (SIMD)-0228, proposes the substitution of the static inflation schedule with a dynamic one that changes token emissions depending on staking participation.
Currently, Solana’s rate of inflation is 4.6% per annum, dropping by 15% every year until it levels off at a rate of 1.5%. The planned amendments, sponsored by industry representatives from Multicoin Capital and Anza, seek to institute a more fluid and market-responsive method of issuing SOL tokens.
Despite the recent volatility, institutional interest in Solana continues to grow. As reported earlier, Franklin Templeton formally filed a registration for the Franklin Solana Trust in Delaware, following a string of asset managers looking to offer Solana ETFs.
Other companies, Canary Capital and Grayscale, have also made filings, after VanEck originally put in a Solana ETF proposal in June 2024. The U.S. Securities and Exchange Commission (SEC) has already recognized some of these filings.
