The Solana blockchain has seen a significant drop in daily transaction fees, hitting levels not observed since early May 2024. On Monday, fees paid on the network amounted to just $639,000, representing a 65% decline from this month’s peak of $1.83 million on August 8 and an 87% decrease from the all-time high of $5.08 million on March 18, according to The Block’s Data Dashboard.
The sharp drop in fees reflects cooling activity on the Solana network, with the fading hype around memecoin trading being a major factor, according to Ruslan Lienkha, Chief of Markets at YouHodler. “I believe the lower transaction fees are linked to the cooling hype around memecoins,” Lienkha told The Block.
This trend aligns with data from CoinGecko, which shows that the total market capitalization of Solana-based memecoins now stands at $7.42 billion, down 2.6% in the past 24 hours. The top five Solana memecoins by market cap—Dogwifhat, Bonk, Popcat, Book of Meme, and Cats in a Dogs World—have each experienced notable declines over the past month, with losses of 28%, 30%, 18%, 14%, and 34%, respectively.
The downturn extends beyond memecoin prices, with the total value locked (TVL) on key Solana-based decentralized exchanges (DEXs) also falling. DefiLlama data reveals that TVL on Raydium has dropped nearly 20% in the last 30 days, while BonkSwap has seen a 23% decline over the same period. Multi-chain memecoin indices have similarly suffered, with The Block’s GMCI Meme Index down over 17% in the past month, and Market Vector’s Memecoin Index hitting a multi-month low.
Lienkha noted that Solana gained popularity as a primary chain for memecoin projects, but the recent decline in user activity could mark the end of the current memecoin craze. “This is similar to what we observed with NFT trading in the previous crypto cycle, and as the memecoin bubble deflates, Solana is becoming a less utilized chain,” he added.
Despite the drop in transaction fees and memecoin activity, Solana’s price has seen a modest recovery, increasing by 2.9% in the last 24 hours to trade at $161.14, according to The Block’s Solana Price Page. However, the token’s market cap remains around $75 billion, reflecting a 14% decline over the past month.
