Solana’s native token has underperformed the wider altcoin market amid weakening on-chain activity and declining network fees and DApp revenues, even as some institutional interest persists.
A central factor behind the underperformance appears to be a softening in network demand. On-chain activity has steadily declined since August, with weekly network fees dropping from around $7 million to $4.5 million and decentralized application (DApp) revenues decreasing by approximately 30%.
These trends suggest that developers and users may be shifting toward competing ecosystems or alternate solutions that do not rely as heavily on Solana’s blockchain.
In contrast, other networks have seen notable gains in activity. Over the past month, transaction counts surged by about 34% on Base, 21% on Arbitrum and nearly 89% on Polygon, while Solana’s transaction growth was comparatively modest at just 4%. This reallocation of activity highlights increasing competition among layer-1 and layer-2 ecosystems for developer and user engagement.
Declining demand and shifting activity weigh on SOL
Despite the weaker price performance and reduced on-chain usage, certain structural factors may be tempering sell-off pressure. Around 68% of SOL’s circulating supply is currently staked, which limits the amount of tokens immediately available for trading and can cushion volatility. Additionally, since the launch of the REX-Osprey SOL+Staking ETF in the U.S., over $636 million in assets have flowed into Solana-linked ETFs, and several companies have added millions of SOL to their treasuries.
Nevertheless, traders and analysts argue that SOL’s ability to close the performance gap with the broader altcoin market hinges on a reversal in on-chain metrics, particularly user engagement and decentralized application activity. With current indicators showing continued weakness relative to competing platforms, the prospects for sustained bullish momentum in SOL appear limited in the near term, even as institutional interest offers some support.
Price targets cited by market commentators vary widely, with ranges for 2025 around $200–$400 and longer-term forecasts extending to $1.000–$1.351 by 2030 and further to $11.698 by 2040; such projections are inherently speculative and contingent on market and regulatory developments. A potential approval of a Solana-focused ETF is frequently identified as a key upside catalyst that could unlock additional institutional capital.
