The total daily transaction fees paid on the Solana SOL
+1.97%
blockchain, measured in U.S. dollars, have fallen to a level not observed since early May 2024.
On Monday, daily transaction fees on Solana dropped to $639,000 — representing a 65% decrease from this month's peak of $1.83 million on August 8 and an 87% decline from the all-time high of $5.08 million on March 18, according to The Block's Data Dashboard.
The decline in daily transaction fees suggests reduced activity on the Solana network, with memecoin trading experiencing the most significant impact, 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 observation concurs with Coingecko data that shows the Solana memecoin market capitalization is now $7.42 billion — reflecting a 2.6% decrease in the past 24 hours. Coingecko data reveals that the top five memecoins by market cap on the Solana network have all decreased in value over the past month. Specifically, Dogwifhat, Bonk, Popcat, Book of Meme and Cats in a Dogs World have declined by 28%, 30%, 18%, 14%, and 34%, respectively.
RELATED INDICES
There has also been a decline in the total value locked on some Solana-based decentralized exchanges that handle a significant amount of memecoin trading. According to DefiLlama data, TVL on Raydium has decreased by nearly 20% over the past 30 days, while BonkSwap has seen a drop of more than 23% in the past month. Multi-chain memecoin indices have experienced declines over the past month. The Block's GMCI Meme Index shows a drop of over 17% in the past month, and Market Vector's Memecoin Index has reached a multi-month low.
The MarketVector memecoin index shows a notable fall since March: Image: MarketVector.
Lienkha described Solana as having gained recognition as a key chain for memecoin projects and that the current fall in user activity could be indicative of the final phase of the memecoin hype in the current crypto market. "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.
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