The Solana blockchain is seeing a significant increase in activity due to the frenzy surrounding the meme coin.
This enthusiasm has boosted network usage and caused transaction fees to reach their highest level in over a year.
Solana Meme Coin Fever Stimulates Network Fees and Adoption
In recent weeks, meme coin activity has exploded again, fueled by a broad rally in the cryptocurrency market led by major assets like Bitcoin. This resurgence has significantly increased trading volume on Solana, leading to an increase in fees. According to Cryptorank, transaction fees on Solana reached $0.15 this month, double the $0.08 level in October and marking the highest level in a year.
Data from DeFiLlama shows that these increased network fees contributed significantly to Solana earning approximately $78.14 million in fees over the past week, placing it among the most profitable networks. It ranked just below Tether with $93.57 million but far ahead of Ethereum, which earned just $40.9 million during the same period.
Not just the core network, Solana-based decentralized applications (dApps) also saw an increase in activity and fees. Platforms such as Raydium, Jito, Pump.fun and Photon have played key roles in this upswing, with Pump.fun and Photon capitalizing on the meme coin craze to attract significant usage.
However, a cryptocurrency researcher at 1kx Network, Wei Dai, has warned that an increase in Solana activity could lead to congestion. He noted that prolonged congestion often leads to increased minimum fees, which can cause dApps and users to leave — a situation Ethereum experienced during the DeFi boom four years ago.
However, Dai also admitted that Solana’s current congestion is mostly short-term, allowing patient users to still make low-cost transactions. He warns, however, that this balance could change unless the network’s infrastructure evolves to effectively meet growing demand.
“Congestion on Solana is ‘bursty.’ Currently, users can still make payment transactions with minimal fees and short delays. However, this may change as demand increases, unless Solana’s technology improves to surpass demand,” Dai additional.
Meanwhile, this spike in activity coincides with Solana reaching new price milestones. Over the past week, SOL’s price has increased nearly 20% to a new historic high of $263, making it one of the best-performing digital assets since Donald Trump won the election on May 5. 11.