- Solana’s revenue has dropped 93% as meme coin trading activity fades.
- Solana’s DeFi TVL fell by 50%, reflecting broader network decline.
- New governance proposal aims to adjust SOL token emissions based on staking.
Solana’s on-chain revenue has fallen over the past two months as the meme coin frenzy that boosted its network’s success has cooled off. In January, Solana’s weekly revenue hit an all-time high of $55.3 million, driven by a surge in meme coins.
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.
DeFi Sector Takes a 50% Plunge
These losses are happening as Solana’s decentralized finance (DeFi) sector declines, with total value locked (TVL) in DeFi projects falling by 50%.
TVL dropped from over $12 billion in January to around $6.4 billion today. This DeFi downturn adds another layer to Solana’s challenges.
Related: Meme Coin Market Grins and Bounces Back with 8% Gain as SEC Greenlights Non-Security Status
Meme Coin Craze Cools Off, Impacting Solana’s Revenue
The downturn in Solana’s performance happens at the same time as a sudden fall in meme coin trading activity, which had been a major source of network revenue. Based on a March 5 report by VanEck, meme coin trading, especially on the Pump.fun platform, made up 80% of Solana’s revenue during its peak. Daily revenue from Pump.fun reached $15 million in late January but has since crashed 95%, down to around $800,000 as of March 7. The meme coin boom turning to bust is a key factor.
This decline comes after the peak of memecoin mania, which was fueled by the launch of Donald Trump’s TRUMP token on January 18 and Melania Trump’s MELANIA token soon after. However, as CoinGecko founder Bobby Ong mentioned, the launch of these tokens was the peak of the meme coin craze, pulling liquidity and attention away from other digital assets.
Solana Looks to Tokenomics Revamp for Revival
To deal with these challenges, Solana’s community is thinking about a new governance proposal. The Solana Improvement Document (SIMD)-0228 , written by Tushar Jain and Vishal Kankani of Multicoin Capital, along with Max Resnick, proposes a more flexible inflation model for Solana’s SOL tokens.
Related: Investors Bet Big on TRUMP Token Amid Trump’s Cryptocurrency Donation Acceptance
Unlike the current fixed inflation schedule, the proposal suggests changing token releases depending on staking participation. Will this new approach restore hope for Solana?
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