tl;dr
In Q2, Solana's trading activity declined sharply, with application revenue dropping 44.2% to $576.4 million, daily DEX volume down 45.4% to $2.5 billion, and perpetual trading volumes falling 28.5%. This reduction was due to decreased memecoin speculation. Despite this, Solana's core network metric...
Solana (SOL) experienced a significant contraction in trading activity during the second quarter, while its core network infrastructure metrics showed notable strength. According to a report by Messari dated August 15, total application revenue on Solana dropped 44.2% quarter-over-quarter to $576.4 million from $1.0 billion. Additionally, average daily spot decentralized exchange (DEX) volume declined by 45.4% to $2.5 billion, and perpetual trading volumes fell 28.5% to $879.9 million daily. This decrease in revenue is attributed to a reduction in memecoin speculation, which had propelled record trading volumes in the first quarter.
Despite the downturn in speculative trading, Solana’s network fundamentals remained robust. The total value locked (TVL) in decentralized finance (DeFi) protocols on Solana grew 30.4% quarter-over-quarter, reaching $8.6 billion. This increase helped Solana retain its position as the second-largest network by TVL, having surpassed Tron in November 2024. The App Revenue Capture Ratio also improved significantly to 211.6% from 126.5%, meaning applications earned $211.60 for every $100 spent in transaction fees. Furthermore, liquid staking penetration increased from 10.4% to 12.2% of the total SOL supply, facilitating expanded DeFi use cases built on yield-generating SOL tokens.
Total staked value on Solana rose 25.2% to $60 billion, with a modest improvement in validator decentralization as reflected by the Nakamoto coefficient reaching 21. This coefficient quantifies blockchain decentralization by indicating the minimum number of entities required to gain control of more than 50% of network resources and potentially compromise security. Additionally, the consensus protocol redesign named Alpenglow was announced, aiming for sub-150 millisecond finality—a 100-fold speed increase from the current 12.8-second confirmation times. This upgrade will remove vote transaction fees and optimize client operations for smaller validators.
Institutional adoption of Solana accelerated during this period. The SEC approved Rex Osprey’s Solana Staking ETF (SSK) on June 27, marking the first U.S.-authorized staking crypto ETF. However, this product operates outside the traditional SEC-registered spot ETF framework by providing exposure through derivative instruments rather than holding SOL directly. Nine other firms have filed for spot Solana ETFs, with decision deadlines set for October 2025.
Network usage showed stability, with non-vote transactions increasing 4% to 99.1 million daily, while fee payers slightly declined by 1.4% to 3.9 million. The market capitalization of SOL grew by 29.8% to $82.8 billion, securing its rank as the sixth-largest cryptocurrency. Overall, the report concludes that the second quarter highlighted Solana’s ability to sustain infrastructure development and maintain institutional interest, independent of speculative trading cycles.