In a striking development for the Solana blockchain, daily transaction fees have plunged to levels not seen since early May 2024, raising concerns about the dwindling activity on the once-bustling network. On Monday, transaction fees on the Solana network fell to just $639,000, marking a staggering 65% decrease from this month’s peak of $1.83 million on August 8, and an even more dramatic 87% decline from the all-time high of $5.08 million recorded on March 18, according to The Block’s Data Dashboard.
This sharp drop in fees is indicative of reduced user engagement on Solana, particularly in the memecoin trading sector, which has seen the most significant impact. Ruslan Lienkha, Chief of Markets at YouHodler, attributes the lower transaction fees to the cooling enthusiasm around memecoins. “I believe the lower transaction fees are linked to the cooling hype around memecoins,” Lienkha told The Block, suggesting that the frenzied trading activity that once characterized the memecoin market on Solana might be entering its final phase.
Supporting Lienkha’s observation, data from Coingecko shows that the Solana memecoin market capitalization has dropped to $7.42 billion, reflecting a 2.6% decrease in the past 24 hours alone. The top five memecoins by market cap on the Solana network—Dogwifhat, Bonk, Popcat, Book of Meme, and Cats in a Dogs World—have all seen their values decline over the past month, with losses ranging from 14% to 34%.
The downturn in memecoin activity has also been mirrored in the total value locked (TVL) on Solana-based decentralized exchanges (DEXs) that facilitate a significant portion of this trading. According to DefiLlama data, TVL on Raydium has dropped by nearly 20% over the past 30 days, while BonkSwap has seen a decline of more than 23% during the same period.
This downturn is not isolated to Solana alone. Multi-chain memecoin indices have also experienced declines over the past month, with The Block’s GMCI Meme Index showing a drop of over 17%, and Market Vector’s Memecoin Index hitting a multi-month low. Lienkha’s comparison of the current memecoin situation to the previous crypto cycle’s NFT trading decline suggests that Solana may be seeing the end of its memecoin-driven boom. “As the memecoin bubble deflates, Solana is becoming a less utilized chain,” he noted.
Interestingly, despite the drop in transaction fees and memecoin activity, the price of Solana’s native token (SOL) has seen a slight increase of 2.9% over the last 24 hours, trading at $161.14 at the time of writing. However, this comes against a backdrop of a broader market decline, with Solana’s market cap standing at around $75 billion—down approximately 14% over the past month.
As the memecoin frenzy appears to wane, the future of Solana’s blockchain remains uncertain. Whether this is a temporary lull or a sign of a more profound shift in the crypto landscape, only time will tell. For now, the sharp decline in transaction fees serves as a stark reminder of the volatility and unpredictability inherent in the world of blockchain and cryptocurrency.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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