Key Takeaways:
Solana’s price dropped 47% in February, with meme coin scandals damaging its reputation despite record-breaking revenue growth.
Pump.fun fueled a massive meme coin boom but faced legal scrutiny, with nearly 90% of launched tokens offering little to no returns.
Despite the controversy, Solana remains the second-largest DeFi blockchain, with analysts suggesting it may need to shift focus beyond speculation.
Solana (SOL) dropped 47% in February, with ongoing meme coin scandals further damaging its reputation. But is the situation as bad as it seems?
SOL’s price fell from $242 to $127 in February despite reaching a new all-time high (ATH) of $293 on Jan. 19. At the time of writing, it had rebounded to $150.
Solana has become the go-to blockchain for meme coin launches, with Pump.fun making the process easier and faster. The result was a surge in meme coin activity, fueling Solana’s performance in late 2024.
In Q4 2024, Solana recorded its best quarter ever, with revenue—often referred to as the chain’s GDP—rising by nearly 213% to $840 million, up from $268 million in Q3, according to Messari.
Source: Messari
However, Pump.fun’s success came with controversy. The platform, which enabled mass meme coin launches, faced criticism for its lack of moderation. Some tokens included violent or discriminatory content, and in one extreme case, a user even threatened suicide if their meme coin failed.
Despite this, meme coin activity on Pump.fun remained high. On Nov. 20, the platform set a new ATH, with 69,046 meme coins launched in a single day.
Matas Čepulis, Founder & CEO of LuvKaizen, shared his thoughts on how the meme coin frenzy has affected Solana:
Unfortunately, the recent meme craze, Murad’s narrative on meme, and the birth of Pump.fun completely ruined the chain by speculation. Now a lot of people are moving away from Solana because it has become nearly impossible to launch a token with a fair launch system. Snipers ruined everything.
“It Became an Ugly Game”
Lawyers have now turned their attention to Pump.fun. On Jan. 15, U.S.-based Burwick Law announced plans to file a lawsuit against the platform, already working with investors who lost money due to its operations.
Determining how many traders lost funds on Pump.fun is challenging, but some crypto researchers have attempted to estimate the scale. According to Sol Statz, as of Feb. 26, nearly 90% of meme coins launched through the platform showed only 0-1x growth—meaning most traders saw little to no returns.
The situation escalated further with the Libra Token (LIBRA) scandal, a project launched via Pump.fun allegedly linked to Argentine President Javier Milei. The token initially surged in price but then crashed, fueling suspicions of a scam. It was later revealed that the team behind LIBRA had also issued the Official Trump (TRUMP) and Melania Meme (MELANIA) tokens.
Source: CoinGecko
The controversy extended to two Solana-based decentralized exchanges (DEXs), Jupiter and Meteora, with accusations that their teams had prior knowledge of the scheme and participated in the manipulation. As a result, Meteora co-founder Ben Chow resigned.
These events have further damaged Solana’s reputation and raised concerns over meme coin speculation. Matas Čepulis noted how the narrative has shifted toward potential money laundering and insider manipulation:
Now a lot of discussions are going on about money laundering via the Solana network and meme launches. It has become an ugly game where insiders and snipers profit, while casual investors expecting to gain some capital end up as exit liquidity.
Is Solana Dead?
According to DeFiLlama, Solana’s Total Value Locked (TVL) in DeFi has fallen more than any other top 15 blockchain over the past 30 days.
Despite a 26.3% decline in TVL, Solana remains the second-largest DeFi blockchain, trailing only Ethereum (ETH).
Matas Čepulis believes Solana is not in crisis and is still benefiting from the current situation. He suggests the blockchain may need time to reassess its priorities:
I would not say that this is a crisis. Solana is the only winner here; they are profiting so much from the fees. I really believe the speculative aspect will definitely remain in their ecosystem, but if they make any shifts towards improving the technology and its narrative, we will have to wait and see.
Meme coins are just one aspect of Solana’s ecosystem. The blockchain is also widely used in liquid staking, derivatives, Real World Assets (RWA), and Decentralized Physical Infrastructure Networks (DePIN), among other sectors.
For now, the crypto community must move beyond the fallout of meme coin-driven speculation and focus on developing regulatory measures to prevent similar scandals in the future.
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