Solana Struggles With Adoption Slowdown

Solana falters. Long presented as one of Ethereum’s most serious competitors, the blockchain today faces a significant decline in its fundamentals : liquidity drop, user disengagement, innovation slowdown. After months of euphoria, the ecosystem shows clear signs of slowdown.

The Onchain Activity Slowdown on Solana

The Solana blockchain, once renowned for its ability to attract capital and talent quickly, today sees its Total Value Locked (TVL), the main indicator of ecosystem vitality, plunge sharply, while JPMorgan has just launched a $50M issuance there .

Indeed, Solana’s TVL dropped from $15 billion in September to less than $5 billion, a loss of over $10 billion in less than three months. Meanwhile, weekly revenues generated by DApps on the platform fell from $37 million to $26 million, illustrating a marked decline in economic activity on the blockchain.

This trend is directly related to a reduction in smart contract deposits, which mechanically increases the amount of SOL available for sale.

This disengagement is also reflected in traders’ attitude towards the native SOL token. On-chain data show that the annualized funding rate for SOL perpetual futures contracts was only 6 % last Friday, signaling weak demand for long positions.

An anomaly was also observed on Thursday, with a negative funding rate of −11 %, interpreted not as a massive bearish signal but as a temporary imbalance corrected by liquidity providers. In summary, several key indicators show growing disinterest in financial products linked to Solana:

• A 46 % drop in the SOL price over three months, with no recovery above $145 ;
• Decreased funding rate : only 6 % annual versus 10–12 % during bullish phases ;
• The temporary negative rate of −11 %, revealing unmanaged volatility ;
• Reduced market depth on DEX, a consequence of declining confidence post-liquidation.

Technical Innovations Struggling to Revive Market Confidence

Despite this deterioration in market indicators, Solana’s technical development is not fading. The blockchain officially launched on mainnet Firedancer this Friday, a new validation client developed for more than three years under the leadership of Jump Trading.

Presented as a major advancement in performance and scalability, this client managed to resynchronize a node in under two minutes. This performance aims to improve network resilience and its capacity to absorb increasing volumes, a central argument in Solana’s long-term strategy.

Meanwhile, some projects continue innovating on the application layer. This is the case for Kamino, the second largest DeFi protocol in the Solana ecosystem in terms of TVL, which announced the launch of new products Friday : fixed-rate loans, off-chain collateral, on-chain credit lines backed by bitcoin, and private credit solutions.

Kamino records $69 million in annualized revenues and offers an average 10 % annual yield on deposits, notable figures in a market cooling context. However, it is unlikely that software improvements or DeFi offering expansion alone will restore the confidence necessary for a sustainable upward trend.

While the ecosystem slows fundamentally, another indicator draws attention : Solana ETFs are exploding . This renewed institutional interest contrasts with the on-chain decline and could redefine, in the long term, the network’s trajectory if this enthusiasm lasts beyond the announcement effect.