Solana, once a high-flying cryptocurrency network, experienced a dramatic downturn in Q4 2025, with its network activity plummeting by a staggering 97%. This sharp contraction followed a period of impressive growth, raising critical questions about the sustainability and future trajectory of permissionless protocols amidst a challenging market environment.
Solana Faces Steep Decline Amid Market Downturn
From a peak of over 30 million active traders in late 2024, Solana's monthly user base dwindled to less than 1 million in 2025, directly impacting the SOL token's price, which crashed from nearly $300 to $120. While a broader market correction contributed to this slump, Solana's situation was uniquely shaped by its reliance on memecoins. These highly speculative assets, which previously served as a key revenue driver and traffic source, were among the first to be hit during the market rout. Though some supporters view memecoins as a "liveness test" for the network, the near-term risk became evident, dragging down SOL's value by 58% during the memecoin lull. Despite this, Solana has garnered institutional interest, notably from Visa for stablecoin settlements, suggesting potential for resilience if its network activity can shift away from speculative gambling.
Shifting Dynamics: Solana vs. Ethereum
The severe decline has widened the revenue gap between Solana and its competitor, Ethereum. In 2025, Ethereum generated over $1.4 billion in annual revenue, significantly outperforming Solana's $502 million – a three-fold difference. This stands in stark contrast to 2024, when Solana pulled in $2.5 billion, highlighting a dramatic 5x revenue decline in the current year. Furthermore, SOL has underperformed ETH by 56% in investor returns this year, reversing its strong relative gains from the previous year. As the network navigates this "crazy year," as described by co-founder Anatoly Yakovenko, the ability of permissionless protocols to consistently grow and maintain revenue remains an open question, with analysts offering conflicting price projections for SOL's immediate future.
