Solana (SOL) is facing tough times! Critical data hits 12-month low! Here's why…
Solana (SOL), after recovering from the 2022 FTX collapse, is facing challenges with its price dropping to around $150 from $300 in early 2023 and daily active addresses reaching a 12-month low of 3.3 million from 9 million earlier this year. The decline is attributed to the waning memecoin craze, which had previously bolstered activity on the network with its faster speeds and lower costs compared to Ethereum. Despite this, Solana's ecosystem shows resilience with growth in DeFi (totaling $10 billion TVL), new decentralized exchanges (DEXs), prediction markets, and protocols for real-world assets. Additionally, the memecoin platform pump.fun dominates the token launch market with a 90% share and over $1 million in daily revenue.
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Solana's Collapse and Recovery
Solana (SOL) faced a major collapse following the bankruptcy of FTX in November 2022. However, the blockchain network managed to rebuild itself from the ashes. Despite this recovery, Solana is currently going through difficult times, with its valuation falling significantly.
Price Decline and Address Activity Drop
As of now, Solana's price has dropped to around $150, a sharp fall from the $300 levels it touched in January. Moreover, the decline is not limited to price alone. The number of daily active addresses on the Solana network has plummeted to a 12-month low, according to The Block.
Network Activity Decline
The seven-day moving average of daily active addresses has fallen from around 9 million at the beginning of the year to 3.3 million. This sharp drop is attributed to the waning memecoin craze, which had boosted Solana's network activity significantly in the latter half of 2024. Solana, during that period, led the memecoin market with its faster speeds and lower transaction costs compared to Ethereum (ETH).
Signs of Strength in the Solana Ecosystem
Despite the decline in network activity, the Solana ecosystem continues to develop. New DEXs, prediction markets, and real-world asset protocols are expanding the blockchain's use cases. In the DeFi sector, Solana's Total Value Locked (TVL) stands at approximately $10 billion, largely driven by projects like Jupiter, Kamino, and Jito.
Memecoin Segment Resilience
The memecoin issuance platform pump.fun remains a powerhouse within the ecosystem, generating over $1 million in daily revenue. It holds a 90% market share among token launch platforms. This highlights that activity remains strong in certain segments despite the broader decline in activity across the network.