Solana’s Daily Transaction Fees Decline

The total daily transaction fees paid on the Solana blockchain 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, particularly in memecoin trading. Ruslan Lienkha, Chief of Markets at YouHodler, stated, “I believe the lower transaction fees are linked to the cooling hype around memecoins.”

Coingecko data shows that the Solana memecoin market capitalization is now $7.42 billion, reflecting a 2.6% decrease in the past 24 hours. The top five memecoins have also seen declines in value over the past month: Dogwifhat (-28%), Bonk (-30%), Popcat (-18%), Book of Meme (-14%), and Cats in a Dogs World (-34%).

Additionally, there has been a decline in the total value locked (TVL) on some Solana-based decentralized exchanges, which handle significant 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 over 23%. 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.

Lienkha noted that Solana is recognized as a key chain for memecoin projects, but the current fall in user activity may indicate the final phase of the memecoin hype in the crypto market. He drew parallels to the decline of NFT trading in previous cycles, stating that as the memecoin bubble deflates, Solana is becoming a less utilized chain.

The Solana price increased 2.9% over the last day, trading at $161.14 at the time of writing, with a market cap of around $75 billion, reflecting a roughly 14% decline over the past month.