Decline in Daily Transaction Fees on Solana Signals Decrease in Activity
Daily transaction fees on Solana have dropped by 65% compared to their peak in August, reaching $639,000 and marking a significant decrease in blockchain activity. This is a sharp decline from the all-time high of $5.08 million in March, indicating a decrease in the hype surrounding memecoins on Solana.
A Decrease in Transaction Fees
The daily transaction fees on Solana have reached their lowest level in several months. This Monday, fees dropped to $639,000, a 65% decrease from this month’s peak recorded on August 8th at $1.83 million.
This decline is even more pronounced compared to the historical peak of $5.08 million reached on March 18th. This significant decrease in transaction fees reflects a slowdown in activity on the network, especially in memecoin trading, which seems to be the most affected sector.
The End of the Memecoin Hype?
This decrease in transaction fees can easily be associated with the weakening hype around memecoins. On CoinGecko, the market capitalization of memecoins on the Solana network is now $7.1 billion, a 6.6% decrease in the past 24 hours. The top five memecoins on Solana — Dogwifhat, Bonk, Popcat, Book of Meme, and Cats in a Dogs World — have all seen significant decreases in value over the past month, ranging from 15% to 40% despite the recent rebound.
Impact on Decentralized Exchanges and TVL
The decrease in memecoin activity is not limited to transaction fees. It has also affected the Total Value Locked (TVL) in some decentralized exchange platforms based on Solana. For example, Raydium, a DEX that handles a significant portion of memecoin trading, has seen its TVL drop by nearly 20% in the past 30 days, while BonkSwap has experienced a decrease of over 23% during the same period.
Towards a Reduction in Solana Usage?
Despite the decline in activity on the network, the price of SOL has increased by nearly 10% over the week, surpassing $160.
In this cycle, Solana had gained a reputation as a major blockchain for memecoin projects, becoming a true open-air casino. However, the current decrease in user activity could indicate the final phase of this hype in the current crypto market.
This situation could resemble the previous cycle where NFT trading experienced a peak followed by an endless decline.
