Solana Revenue Tanks 93%: Meme Coin Market Freefall—Network Earnings Suffer
Mar 12, 2025, 05:40 IST
However, new data shows that revenue has tanked 93%, down to around $4 million in the past week, the lowest level since September. This revenue drop is a bombshell for Solana..
Besides the revenue dip, Solana’s weekly decentralized application (DApp) revenue has also decreased, dropping by about 86%. DApp revenue fell from $238 million in mid-January to $32 million in recent weeks. These are significant hits to Solana’s ecosystem.
Solana, a prominent blockchain platform, has experienced a significant decline in its financial metrics, primarily due to the recent downturn in the meme coin market. The network's weekly revenue has plummeted by 93%, dropping from a peak of $55.3 million in mid-January to approximately $4 million, marking its lowest point since September.
Impact of Meme Coin Market Decline
The surge in meme coin activity had been a substantial contributor to Solana's revenue. At its zenith, meme coin trading constituted nearly 80% of the network's total revenue. However, the market capitalization of meme coins has sharply declined by 68%, falling from $137 billion in December to $44 billion recently. This downturn has directly impacted Solana's financial performance.
Decentralized Finance (DeFi) Sector Affected
The decline in meme coin activity has also adversely affected Solana's decentralized finance (DeFi) ecosystem. The total value locked (TVL) in Solana-based DeFi platforms has nearly halved, decreasing from $12 billion to around $6.4 billion. This reduction indicates a significant withdrawal of liquidity from the network.
Influence of High-Profile Meme Coin Failures
Several high-profile meme coin projects have faced controversies, exacerbating the market's decline. For instance, the LIBRA meme coin, promoted by Argentina’s President Javier Milei, experienced a rapid rise to a $4 billion market cap before crashing by over 90%, leading to allegations of fraud. Similarly, the HAWK token, launched by influencer Haliey Welch, saw its value plummet by 91% shortly after its release.
Impact on Solana's Native Token (SOL)
The native token of the Solana network, SOL, has not been immune to these developments. Since reaching an all-time high of $293 in mid-January, SOL's value has decreased by 58%, currently trading at around $122. This decline reflects the broader challenges facing the network amidst the meme coin market's contraction.
Community Response and Future Outlook
In response to these challenges, the Solana community is actively discussing proposals to adjust the network's tokenomics. One such proposal suggests replacing the current fixed inflation schedule with a dynamic model that adjusts token emissions based on staking participation. Additionally, institutional interest in Solana persists, with firms like Franklin Templeton filing for Solana-based exchange-traded funds (ETFs), indicating potential long-term confidence in the platform.
The recent decline in meme coin activity and its impact on Solana's revenue underscore the volatility inherent in the cryptocurrency market. As the network navigates these challenges, the community's strategic decisions will be crucial in determining Solana's resilience and future growth.