40% Fewer Users on Solana: Is the End Near?
A recent report has revealed troubling signs for Solana. The monthly capital inflow rate to Solana and its MEME index has turned negative, reaching -5.9%. This decline marks a sharp retreat from the peak in December 2024, mainly due to the drop in investments in memecoins.
At the same time, the number of active addresses on the Solana network has fallen to a weekly average of 9.5 million in February, representing a nearly 40% decrease compared to the 15.6 million recorded in November 2024. Even the initial craze for memecoins seems to be fading, with token creation momentum slowing down and memecoins seeing a sharp decline.
Impact of Memecoin Scams on Solana
The downward trend in user activity can be partially attributed to disappointing memecoin projects, particularly the LIBRA token, which was supported by Argentine President Javier Milei. This project was involved in a scam, leading to the siphoning of over $107 million in liquidity and ruining more than 13,000 investors. Such events have further damaged confidence in the Solana ecosystem.
A Blessing in Disguise?
Despite the loss of confidence and the massive capital outflow from Solana to other blockchains, some analysts believe that this current crisis could be a blessing in disguise for the network. Over $7.7 million has been moved to Arbitrum, and more than $6.9 million has been transferred to Ethereum.
Some experts argue that this “purge” could ultimately benefit Solana. By eliminating bad actors and raising the standards within the ecosystem, the network’s resilience and credibility could be significantly enhanced. This could lead to healthier and more sustainable growth for Solana’s blockchain in the future.
Looking Ahead: Solana’s Long-Term Outlook
While scams related to memecoins have temporarily weakened activity and trust within the Solana ecosystem, this cleaning period could lay the foundation for stronger, more reliable growth. As the network regains trust and weeds out harmful elements, Solana may emerge as a more robust blockchain, well-positioned for long-term success.
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