Solana Continues to Lead Despite Decrease in Trading Volume
Despite a 60% monthly decrease in trading volume, Solana managed to register an impressive $102.4 billion in trading volume in February, maintaining its position as a market leader. The decline in volume can be attributed to the cooling off of the memecoin frenzy that followed the LIBRA token fiasco.
Consistent Performance by Solana
Solana has now recorded over $100 billion in trading volume for the fourth consecutive month. In January, it achieved a record-breaking monthly trading volume of over $260 billion, doubling its previous record of $120.5 billion.
Overall Market Trends
- The total on-chain trading volume across major blockchains decreased by nearly $200 billion in the last month.
- Binance Smart Chain (BSC) was the only exception, with a trading volume of $81.1 billion, just $600 million shy of its January performance.
- Ethereum maintained its position ahead of BSC in terms of trading volume, surpassing it by $100 million last month.
Impact of Memecoin Trading on Solana
According to Blockworks data, memecoins accounted for nearly $206 billion of Solana’s monthly trading volume in January, comprising 79% of the total volume.
However, in February, the memecoin trading volume witnessed a significant drop, totaling $99.5 billion. Despite the decrease, memecoins still represented 97.1% of Solana’s monthly trading volume.
This trend highlights Solana’s heavy reliance on memecoins for trading activity, a sector that was heavily impacted by the LIBRA token incident.
Challenges Faced by Memecoins
Following President of Argentina Javier Milei’s endorsement of a memecoin as a means to fund Argentinian ventures, the token experienced a surge in price, reaching a $4.5 billion market cap. However, the price of the token plummeted by 95% in the subsequent two days.
The aftermath of the president-endorsed token incident raised concerns about insider trading activities, with reports indicating that two wallets profited over $10 million from purchasing the token after Milei’s endorsement.
Furthermore, memecoins experienced an average drawdown of nearly 46% in February, while the overall crypto market saw an average retraction of 37% according to Artemis data.
Current Market Landscape
Despite the decline in memecoin activity, Solana continues to face challenges in March as Ethereum has taken the lead in monthly trading volume after trailing behind for five consecutive months.
