Solana Q1 Review: Revenue Up, Fees Down, But DeFi TVL Down

In the first quarter of 2025, despite a 20% increase in application revenue, Solana faced a 64% decline in TVL, with transaction fees dropping 24% compared to the previous quarter.

Solana is consolidating its position in the cryptocurrency market, but its future will depend on its ability to address challenges and maintain growth momentum.

Q1 Revenue Reaches $1.2 Billion: January Stands Out as a Bright Spot

According to a report from Messari, Solana (SOL) achieved a total application revenue (chain GDP) of $1.2 billion in the first quarter of 2025. This result marks a 20% growth compared to the previous quarter, with $970.5 million. This was Solana's highest-performing quarter in the past 12 months, showing a strong recovery of its ecosystem after a significantly volatile year.

"Solana's economy is exploding," Crypto Banter commented on X.

Notably, January contributed nearly 60% of the total quarterly revenue. This growth reflects the increasing demand for applications on Solana, especially in meme coins, DEXs, and crypto wallets.

Solana's recovery can be explained by several factors, including low transaction fees and high processing speed, which are competitive advantages of this blockchain compared to rivals like Ethereum.

Pump.fun Leads the Way

Among Dapps on Solana, Pump.fun emerged as a notable leader with revenues of $257 million, occupying a significant portion of the ecosystem's total revenue.

Pump.fun's success can be explained by the meme coins trend attracting community attention, especially after the launch of the Trump meme coin on 01/17, which boosted trading activity on Solana. However, Pump.fun's rapid explosion brought many negative consequences to the market.

Following Pump.fun is Phantom wallet, ranking second with revenues of $164 million. Phantom has long been one of the most popular wallets on Solana due to its user-friendly interface and seamless integration with DeFi and Non-Fungible Token applications.

Photon ranks third with revenues of $122 million, a 13% increase from the previous quarter, showing the application's stable growth.

DeFi TVL Drops Sharply, but Stablecoin Sees Breakthrough Growth

Despite impressive Dapp revenues, the total value locked (TVL) in DeFi protocols on Solana dropped sharply by 64%, reaching $6.6 billion. This decline could be due to volatile market sentiment, with investors withdrawing capital from DeFi protocols to move to safer assets like stablecoins.

Meanwhile, the stablecoin market on Solana witnessed a breakthrough growth, with total value increasing 145% to $12.5 billion. Notably, USDC—the leading stablecoin on Solana—recorded a 148% increase from the previous month, reaching a value of $9.7 billion, four times that of its main competitor, USDT.

USDT also showed strong performance, increasing 154% to reach a value of $2.3 billion.

Transaction Fees Decrease

Another highlight from the Messari report is the reduction in transaction fees on Solana. The average transaction fee in the first quarter of 2025 decreased by 24% compared to the previous quarter, down to 0.000189 SOL (equivalent to $0.04).

This low fee is one of the primary reasons Solana continues to attract users and Dapps, especially in areas like meme coins, DeFi, and Non-Fungible Token trading.

The first quarter of 2025 marks an important step for Solana, with application revenues reaching $1.2 billion. However, the 64% drop in DeFi TVL is a concerning signal. The ecosystem is facing numerous challenges, including volatile market sentiment and competition from other blockchains.

To maintain growth momentum, Solana needs to continue leveraging its advantages of low transaction fees and high processing speed, while addressing DeFi-related issues to attract more capital from investors.

SOL is trading at $161.22 at the time of writing. Technical indicators suggest SOL is entering an accumulation phase near an important support level. However, some traders remain very optimistic about it.

"$SOL – Sol's monthly chart is forming a large ascending triangle pattern. Breaking through will trigger a strong surge," an analyst commented