Solana decentralized exchange (DEX) volume remained relatively high in February despite the memecoin market crash. Digital assets firm VanEck said in its monthly report that Solana DEX volume was still near the entire volume for the Ethereum ecosystem, including Layer-1 and Layer-2 networks.
According to the report, Solana DEX volume, which peaked at almost 50% market share of DEX volumes in January 2025, plummeted in February, dropping to around 30%. This resulted from the sharp decline in memecoin activity, responsible for around 80% of Solana’s revenue.
The collapse in memecoin activity was due to several factors, including the rugpull of Libra memecoin, a token promoted by Argentina president Javier Milei, and the general bearish turn in the crypto market in February.
As a result of this, Solana saw a decline across multiple network metrics. Its on-chain trading dropped 80%, DEX volumes fell 55%, and fees dropped 63%, while MEV activity is also down 63%
Nevertheless, the network held its own in terms of trading volume. According to Defillama data, Solana has the highest DEX volume in the last 30 days, with $97.16 billion, while Ethereum alone had $83.071 billion. However, Ethereum and its L2s did far better than Solana, with Arbitrum recording $24.37 billion, Base with $30.97 billion, and OP Mainnet with $2.59 billion.
Upcoming upgrades could restore Solana’s dominance
Meanwhile, Solana is in the middle of several upgrades and proposals that could change the network on a fundamental level. VanEck believes that this could be good for the network as the upgrades will boost its technical abilities and economic framework.
The firm analysts wrote:
“These changes could help stabilize and enhance Solana’s position in the crypto ecosystem moving forward.”
As of February, one of these upgrades, SIMD 096, has already been implemented. This update focused on Solana priority fees, which account for 40% of all fees on Solana, by changing how the fee is allocated. Before now, Solana used to burn 50% of the fee and allocate 50% to validators. However, the upgrade means 100% will go to validators.
Another proposal on priority fees, SIMD 0123, will also come up for voting soon. This new proposal will mandate validators to share an agreed percentage of the fees with stakers.
However, the biggest proposal that is up for a vote within the Solana community is the SMID 0228. This proposal, which is already subject to controversy, will reduce the SOL emissions if approved and could cut the annual supply of SOL by more than 80%.
While most people consider it a good proposal that could have a long-term positive impact on SOL value, there are concerns that it will negatively affect small-scale validators on the network. Per the report, only 458 of the 1,323 validators on Solana currently have enough stake to meet the network’s basic profitability threshold.
If the SIMD 0228 IS implemented, the majority of validators on Solana may become financially unsustainable and shut down, and this could lead to centralization on the network.
In order to address this concern, some community members have also called for a reduction in the cost of running a Solana validator, particularly the cost of voting, so that small-scale validators can remain sustainable.
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