Solana’s Active Addresses Drop to 12-Month Low As Memecoin Activity Fades

Solana’s active addresses decline to 3.3 million, down from January’s peak of 9 million.

DeFi projects on Solana, like Jupiter and Kamino, continue to grow despite the memecoin downturn.

Solana ETFs experience strong institutional inflows, surpassing Bitcoin and Ethereum ETFs.

Solana’s active addresses have sharply declined to their lowest point in 12 months, dipping to about 3.3 million. This marks a drop from the peak of over 9 million active addresses seen in January. The fall in activity comes after a year marked by a booming memecoin market on the network, which now seems to be losing momentum. Despite the slowdown in memecoin trading, other aspects of Solana’s ecosystem continue to show growth, with decentralized finance (DeFi) projects gaining traction.

Declining Memecoin Activity Hits Network Usage

The rise of Solana earlier this year was mainly driven by its low transaction costs and high speeds that attracted memecoin traders. Nonetheless, when the hype around the memecoins died down, the number of active addresses on the Solana blockchain started to drop. By the end of 2024, the memecoin trade had gone up on sites such as Pump.fun, which raked in over $1 million in daily trading volume. But this activity now constitutes only a fraction of Solana’s total network use and is indicative of the general decline in memecoin popularity.

Source: X

Data shows that while specific projects still enjoy concentrated activity, the general trend indicates a decline in Solana’s user engagement. This trend illustrates the rapid changeability of the crypto market, especially when user activity is tied to temporary trends like memecoins. Solana’s experience mirrors what has been observed on other blockchain networks that depend heavily on a single use case or token category.

Solana’s DeFi Growth Amid Active Address Decline

While active addresses have dropped, Solana’s DeFi total value locked (TVL) has remained stable at around $10 billion. Leading DeFi platforms on Solana, including Jupiter, Kamino, and Jito, continue to drive growth. Despite the slowdown in memecoin trading, Solana’s infrastructure continues to expand, with new developments in decentralized exchanges, prediction markets, and real-world asset protocols.

The total value locked (TVL) ranking of the network signifies its persistent power in DeFi, while Solana seems to be expanding its services to remain in the race in this area. It is possible that this shift in Solana’s strategy towards diversification will allow it to soften the impact of the memecoin trend’s decline, and at the same time, broader and more eco-friendly applications will take the lead in its priorities.

Solana ETFs See Strong Institutional Inflows

Solana’s ETFs have experienced a major influx of institutional interest notwithstanding the decrease in active addresses. The inflow into Solana ETFs reached an all-time high and lately even surpassed that of Bitcoin and Ethereum ETFs. Among the Solana ETFs, the inflows of Bitwise’s BSOL and Grayscale’s GSOL were $12.5 million and $5.2 million, respectively. The funds have performed well, despite the overall market trend, where BSOL’s lower management fee is also considered as a factor contributing to its growth.

The 12-day positive inflows streak with a total of $1.5 million inflows has brought the Solana ETF to the forefront, thus showing investors’ confidence in Solana’s future potential even when the number of active users is going down. With the increasing institutional presence, it is certain that the success of Solana ETFs will further cement its place in the overall crypto market.

The change in Solana’s active user numbers may imply that Solana is now more in their DeFi and ETF diversification; thus, there is a possibility for long-term growth. The ability to shift focus from memecoins to DeFi gives Solana an advantage it can use to remain relevant in the dynamic cryptocurrency market.