Solana on-chain revenue decline has sharply declined over the past two months as the meme coin trading mania that fueled its surge has cooled. Weekly network revenue on Solana hit an all-time high of $55.3 million in mid-January, driven by a boom in meme coin minting.
However, that momentum has collapsed, with revenue plunging 93% to just $4 million last week—its lowest level since September, according to DeFiLlama data. Solana’s decentralized application (DApp) revenue has also taken a significant hit, dropping 86% from $238 million in January to $32 million last week.
Solana’s DeFi TVL Sinks Nearly 50%
Meanwhile, total value locked (TVL) in Solana’s DeFi ecosystem has been cut nearly in half, falling from $12 billion to approximately $6.4 billion over the same period. The decline coincides with a sharp drop in meme coin trading activity, which accounted for 80% of Solana on-chain revenue decline, according to a March 5 report by VanEck. The Pump. Fun trading platform, which fueled much of Solana’s meme coin craze, saw its daily revenue peak at $15 million in late January before plummeting 95% to $800,000 on March 7, per Dune Analytics data.
Memecoin mania peaked in mid-January when Donald Trump launched his token (TRUMP) on Jan. 18, followed shortly by Melania Trump’s MELANIA token on Jan. 20. According to CoinGecko founder Bobby Ong, the initial surge in interest pulled liquidity away from other cryptocurrencies, marking the high point of the meme coin frenzy.
Since then, both tokens have collapsed. $TRUMP has plunged 86% from its peak, now trading at $10.50, while $MELANIA has lost 95% of its value, dropping to $0.71 in just seven weeks. The overall memecoin market cap has also suffered, falling 68% from a December high of $137 billion to just $44 billion, according to CoinMarketCap.
The downturn has also impacted Solana’s price, which has fallen 58% from its mid-January all-time high of $293. The cryptocurrency dropped another 5% on the day, trading at $122 at the time of writing.
Solana Community Debates Proposal
The Solana community is actively discussing a governance proposal, Solana Improvement Document (SIMD)-0228, which seeks to revamp the network’s tokenomics by introducing a dynamic, market-driven inflation model for SOL tokens. The proposal, authored by Multicoin Capital’s Tushar Jain and Vishal Kankani and Max Resnick, lead economist at Anza, aims to replace Solana’s fixed inflation schedule with a system that adjusts token emissions based on staking participation.
Solana follows a fixed inflation schedule, starting at 4.6% annually and decreasing by 15% yearly until stabilizing at 1.5%. It is worth noting that investment firms are moving swiftly with their Solana ETFs. Investment giant Franklin Templeton recently filed a registration for the Franklin Solana Trust in Delaware. The filing follows similar applications from Canary Capital and Grayscale, which have already been acknowledged by the U.S. Securities and Exchange Commission (SEC). VanEck was the first to propose a Solana ETF in June 2024, prompting a series of filings from prominent asset managers.
Summary
Solana’s on-chain income has dropped significantly while meme coin trading fever cools. Furthermore, its distributed application (DApp) income and DeFi TVL are drastically declining. Once driving Solana’s revenue increase, meme coins like $Trump and $MELANIA have collapsed, so the decrease follows. In reaction to these developments, the community is debating a modification in Solana’s tokenomics.