- Solana’s network revenue has plunged 93% as memecoin trading declines, impacting on-chain activity.
- Proposed network upgrades could reshape staking rewards and validator economics, sparking debate in the community.
Solana’s once-thriving revenue stream has taken a massive hit. The network, which recorded an all-time high revenue of $55.3 million in mid-January, has plummeted to a mere $4 million, representing a staggering 93% downturn.
The decline is largely attributable to the dying hype of memecoin trading, which was previously a key catalyst for Solana’s expansion. DApp revenue has also taken a sharp drop, diving from $238 million in January to only $32 million last week, based on DeFiLlama data.
Even with the decline in memecoin trading, Solana’s decentralized exchange (DEX) volumes are still comparable to Ethereum’s whole ecosystem.
Asset manager VanEck pointed out Solana’s robust performance in its recent market report, adding that the blockchain has surpassed most rivals in both price appreciation and on-chain activity.
Solana’s token price grew by 191% in 2024, and its stablecoin supply grew by 291%. Yet, the recent decline in trading activity makes one wonder if Solana will be able to maintain this pace.
The precipitous decline in revenue has coincided with a wider slump in major trading metrics. Stablecoin transfers, an important gauge of on-chain activity, are down 80% since January.
Meanwhile, DEX volumes have fallen by 55% and fees generated for the network are down by 63%. The massive shrinkage of these numbers indicates that Solana’s period of explosive growth might have encountered a hurdle.
Proposed Upgrades Could Reshape Validator Economics
As Solana navigates this downturn, developers are pushing forward with protocol upgrades designed to strengthen the network. One major change came with the introduction of SIMD 096, which redirected 100% of priority fees to validators.
Previously, half of these fees were burned, but this adjustment aims to provide validators with stronger incentives to support on-chain transactions. Experts like Anatoly Yakovenko believe that this shift will improve network security by discouraging off-chain trading deals that previously undermined the fee system.
A second important proposal, SIMD 0123, is pending a vote. If passed, it would create an automatic system for paying out priority fees to stakers so that validators would more equitably share rewards. The adjustment is likely to allocate more revenue to stakers and less to validators, a step that has generated controversy among stakeholders.
The controversial SIMD 0228 proposal aims to adjust Solana’s 4.7% inflation rate based on staking. More staking lowers inflation, reducing token dilution, while less staking increases it to boost security. This could cut validator rewards by up to 95%.
SIMD-0228:
As we head to the vote in epoch 753, I am proud to share that we have spent almost two months discussing SIMD-0228 in public. (Check screenshot for details).
Throughout the process, we incorporated several pieces of community feedback:
1. Transitioned from a… pic.twitter.com/0g138cFGY8
— Vishal Kankani (@kankanivishal) March 6, 2025
If bigger players such as Binance and Coinbase come to occupy much of the validator space, Solana’s decentralization may be in jeopardy. Reducing voting fees is being suggested by some in the community as a possible remedy, but it is unclear what the long-term effect of such shifts would be.
Solana Holds Above Key Support, Traders Eye $140
Despite the challenges, Solana’s price has remained relatively stable. The token is currently trading at $125.75, reflecting a 4.22% gain in the past 24 hours. Market analysts are closely watching the $125–$110 support range, which could determine the next major price movement for SOL.
Open interest in futures has fallen 19% since the start of March, indicating less trader conviction. SOL may rally back if it remains above the range. A breakdown below $110, however, might take the price down to the $95–$100 level.
Resistance sits between $140 and $150, with a major shift needed to reclaim the $188 mark, which aligns with the 50-day simple moving average.
Technical indicators are showing mixed signals. The Relative Strength Index (RSI) is near oversold territory at 35.11, suggesting weak bullish momentum.
Meanwhile, the Moving Average Convergence Divergence (MACD) remains bearish, indicating that selling pressure still dominates. The on-balance volume (OBV) is also declining, reflecting weak trading activity.