Solana (SOL) is facing headwinds as its Total Value Locked (TVL) decreases and the once-hot memecoin market cools down. This confluence of factors has contributed to a challenging environment for the high-performance blockchain, which had previously enjoyed a period of rapid growth and popularity.
One of the most significant indicators of Solana's struggle is the decline in TVL, which represents the total value of assets locked within its decentralized finance (DeFi) ecosystem. Solana's TVL has dropped from a peak of $12.191 billion to approximately $6.939 billion, a decrease of nearly 50%. This substantial decline raises concerns about investor confidence and the overall health of the Solana network. A decreasing TVL can indicate that users are withdrawing their assets from the platform, potentially signaling a lack of trust or a shift in investment strategies.
The fading demand for memecoins, which played a significant role in Solana's surge in late 2024 and early 2025, is another contributing factor to its current challenges. The frenzy surrounding memecoins led to increased network activity and attracted a wave of new users. However, this speculative boom has cooled off considerably, resulting in a decrease in daily active addresses on the Solana network. Daily active addresses have fallen from over 9 million at the beginning of the year to 3.3 million, marking a 12-month low. This decline suggests that many of the bots and short-term users who were drawn in by the memecoin hype have left the network, impacting fee revenue and liquidity.
Adding to the pressure, Solana's native token, SOL, has struggled to maintain prices above $145 in recent weeks. As of December 12, 2025, SOL is trading around $131.88, down 3.81% in the last 24 hours. This price stagnation reflects the broader market fatigue and reduced demand for decentralized applications (DApps) on the Solana network. Revenues from Solana DApps have decreased from $37 million to $26 million per week over the past two months, further highlighting the decline in network activity.
Despite these challenges, Solana's ecosystem retains fundamental strengths. Its DeFi TVL remains near $10 billion, supported by platforms like Jupiter, Jito, and Kamino. Developers continue to build stablecoin primitives, high-throughput consumer applications, and institutional-grade infrastructure, indicating a long-term commitment to the network. Moreover, Solana is making a strategic pivot towards Real World Assets (RWAs), with nearly 80% of its newest partnerships focused on this area.
Analysts point to a few key levels to watch for SOL. A sustained break above $145 could trigger a rally towards $153 and potentially $163, while failure to hold $130 could lead to a decline towards $124 or even $121.66. Market conviction, liquidity behavior, and reaction around the $137-$145 range will be crucial in determining the next direction for SOL.
Solana's recent performance reflects a complex interplay of factors, including declining memecoin demand, decreasing TVL, and broader market trends. While the network faces challenges, its underlying technology, ongoing development efforts, and strategic pivot towards RWAs offer potential avenues for future growth and recovery. The coming weeks and months will be critical in determining whether Solana can weather the current storm and regain its position as a leading blockchain platform.
