The Solana blockchain has seen a significant drop in daily transaction fees, hitting levels not observed since early May 2024. On Monday, the total daily transaction fees on Solana fell to $639,000, marking a 65% decrease from this month’s peak of $1.83 million on August 8 and an 87% drop from the all-time high of $5.08 million on March 18, according to data from The Block’s Data Dashboard.
This sharp decline in transaction fees points to reduced activity on the Solana network, particularly in the memecoin sector. Ruslan Lienkha, Chief of Markets at YouHodler, attributed the lower transaction fees to the waning hype around memecoins. “The cooling hype around memecoins is likely driving the reduced transaction fees,” Lienkha told The Block.
Supporting this observation, Coingecko data shows that the market capitalization of Solana-based memecoins has dropped to $7.42 billion, reflecting a 2.6% decrease in the past 24 hours. Over the past month, the top five Solana memecoins by market cap—Dogwifhat, Bonk, Popcat, Book of Meme, and Cats in a Dogs World—have seen significant declines in value, with drops of 28%, 30%, 18%, 14%, and 34%, respectively.
The decline in memecoin activity has also affected decentralized exchanges on Solana that support memecoin trading. According to DefiLlama, Raydium’s total value locked (TVL) has dropped by nearly 20% in the last 30 days, while BonkSwap has experienced a decrease of over 23% during the same period. Broader memecoin indices have similarly struggled, with The Block’s GMCI Meme Index down more than 17% this month, and Market Vector’s Memecoin Index reaching a multi-month low.
Lienkha noted that Solana had become a key platform for memecoin projects, but the current decline in user activity may signal the end of the memecoin craze in the current crypto market. He likened this to the previous cycle’s decline in NFT trading, suggesting that as the memecoin bubble deflates, Solana is becoming a less utilized blockchain.
Despite the decrease in transaction fees and activity, the price of Solana’s token increased by 2.9% over the last day, trading at $161.14 at the time of writing. However, the token’s market cap stands at around $75 billion, reflecting a roughly 14% decline over the past month.