Source: The DeFi Report; Author: Michael Nadeau; Translation: BitpushNews
Solana started 2025 with a bang, becoming Trump's preferred platform for launching Memecoin and the first stop for most new users entering this cycle. However, how did 2025 actually end?
The current Solana network appears to be entering a cyclical reset period. On-chain speculative demand continues to decline, and new application scenarios and traditional finance (TradFi) integration have yet to fill this gap. Q4 operating performance weakened significantly: Total Revenue (REV) fell 43% to its lowest level since Q3 2023; Real On-Chain Yield fell 56% to 0.46%. Meanwhile, fundamentals deteriorated with deteriorating user activity, and operating costs rose sharply relative to user fees.
This article will provide a comprehensive data review of Solana's Q4 performance. I. Operational Performance: A Double Decline in Revenue and Earnings 1. Real Economic Value (REV) The Solana network generated only $91.1 million in total fees in Q4, the lowest point since Q3 2023, significantly lower than the $222.7 million in the previous quarter. Full-year 2025 performance: $1.4 billion in REV, a 1.4% decrease from last year. For comparison: Ethereum network fees were $141 million in Q4 and $763 million for the full year of 2025. Data Breakdown: Base Fees: Q4 down 32% (but up 43% for 2025) Jito Tips (MEV): Q4 plummeted 75% (up 8% for 2025) Priority Fees: Q4 down 51% (up 15% for 2025) Voting Fees: Q4 down 27% (up 32% for 2025) Core Conclusions: Solana is the “speculative stronghold” of this cycle (along with Hyperliquid). The most powerful applications on the network (Pump, Axiom, Raydium, Jupiter) all cater to retail traders—making on-chain revenue highly cyclical and dependent on speculative demand. With social attention on cryptocurrencies at a six-year low, it’s hard to see this trend reversing in the short term. In the long term, we believe Solana needs to lead the tokenization of on-chain equity (and other RWAs) to smooth out the extreme cyclicality of its on-chain user base. Given the recent challenges facing the Clarity Act, this will likely take some time.
Q4 real on-chain yield (annualized) was only 0.46%, a decrease of 56% compared to the previous quarter.
Of these, 72% came from priority fees and 28% from MEV. The decrease in the MEV share reflects a significant weakening of on-chain competition (i.e., speculative demand) this quarter. 3. Total On-Chain Yield The total annualized yield, combined with protocol issuance rewards, is 6.7%. Notably, 93% of the yield comes from the issuance of new SOL tokens. Due to a 55% decrease in priority fees and MEV, the total yield slipped from 7.64% in Q3. II. Network Fundamentals: The Challenge of Efficiency 1. Monthly Network GDP Note: GDP refers to the total fees generated by top-level applications on the chain (excluding the public chain's own fees). Q4 GDP generated by top-level applications was $485 million, a 47% decrease quarter-over-quarter. In comparison, Ethereum L1 applications generated $2.3 billion in GDP in Q4.
Active Addresses: The average daily active addresses in Q4 were 2.2 million, a decrease of 19% compared to the previous quarter.
Active Staking: As of December 31, 2025, a total of 421.7 million SOL tokens were staked (representing 75% of the circulating supply), a 3.5% increase compared to the previous period.
Active Staking: As of December 31, 2025, a total of 421.7 million SOL tokens were staked (representing 75% of the circulating supply), a 3.5% increase compared to the previous period.
3. The Cost of Producing $1 of REV
The average cost of generating $1 of real economic value in Q4 rose to $11.76, a surge of 105% quarter-over-quarter.
What does this mean? This indicates that the inflationary cost (incremental issuance) of the network relative to the actual value generated is rising in order to maintain network security. If Solana were a company, it would be time to cut management costs and reduce expenses.
What does this mean? This indicates that the inflationary cost (incremental issuance) of the network relative to the actual value generated is rising. If Solana were a company, it would be time to cut management costs and reduce expenses.
III. Stablecoins Stablecoin Supply The total supply of stablecoins on-chain reached $15.4 billion, a 4.4% increase month-over-month. This represents 5% of the total stablecoin supply in the crypto market, ranking after Ethereum, Tron, and BNB. Top Issuers: Circle/USDC: $9.9 billion (down 1% in Q4) Tether/USDT: $2.1 billion (down 10% in Q4) Paypal/USDPY: $870 million (up 95% in Q4) Paxos/USDG: $870 million (up 80% in Q4) Solstice/USX: $306 million (up 83% in Q4) Effective Stablecoin Turnover Rate The effective stablecoin turnover rate measures the daily turnover rate of each USD stablecoin on-chain. This metric filters out noise from wash trades and recurring transactions, and is calculated as: Daily net USD transfers / Circulating supply. An increase in the value indicates increased economic activity. The average turnover rate in Q4 was 0.22, a 282% increase quarter-over-quarter. However, this increase is largely attributed to the sharp volatility that occurred during the 10/10 liquidation event. A reading of 0.22 means that 22% of the stablecoin supply turned over during the quarter. For reference, Ethereum L1 Q4 turnover was 3%, and the overall Ethereum L2 turnover was 5%. Net Dilution Rate = Daily Protocol New Supply minus SOL burned / Circulating Supply (Annualized). A positive value represents dilution to non-staking SOL holders. The annualized net dilution rate in Q4 was 4.57%, a decrease of 5.5% quarter-over-quarter. Driving factors: SOL issuance: 6.45 million SOL in Q4 (6.8 million in Q3) SOL burn: 63,764 SOL in Q4 (76,247 in Q3) Net result: A net increase of 6.38 million SOL in Q4 (annualized inflation rate of 4.57%). IV. DeFi: The Rise of Private DEXs DEX Trading Volume Private DEXs on Solana witnessed significant growth. Daily trading volume averaged $2.2 billion (48% of the total), a 50% increase quarter-over-quarter. Meanwhile, public DEXs averaged $2.5 billion in daily trading volume in Q3, a 5% increase quarter-over-quarter. Overall, total DEX trading volume grew by 15% this quarter. Top-performing DEXs by Trading Volume: HumidiFi (private): $1.4 billion/day (up 105% in Q4) Raydium: $985 million/day (up 6% in Q4) Meteora: $700 million/day (up 27% in Q4) Orca: $473 million/day (down 24%) Tessera (private): $303 million/day (up 57% in Q4) Pump Fun: $88 million/day (down 24% in Q4) 24%)
Measures the turnover rate per dollar within DeFi protocols. The Q4 metric rose 22%, with the daily average turnover rate at 46% of TVL. Much of this activity is attributed to the extreme volatility caused by 10/10 liquidation events.
In Q4, a total of 2.1 million tokens were created on the Solana launch platform, a 24% decrease compared to the previous quarter.
Pump Fun continued to lead with 1.6 million new tokens (75% market share).
Pump Fun Meteora was a highlight in Q4, growing by 18% and capturing 21% of the market share. V. Fair Value From a valuation perspective, SOL's current MVRV is 0.95, meaning its price is lower than its realized price (approximately $145). From a "fair value" perspective, SOL is currently trading below its realized price (a proxy for the cost of holding all tokens on the network) of $145, with an MVRV of 0.95. At the bottom of the 2022 bear market, SOL fell to 22% of its realized price. While we do not expect this cycle to repeat itself, we do believe that SOL will at some point be significantly below its realized price, with a target range of $90 – $110.
200-week moving average
We also expect SOL to retest its long-term 200-week moving average at some point, currently valued at $103.
Solana has weathered the darkest hour of late 2022, proving that it not only survived but has become stronger than ever before.
Solana has survived the darkest hour of late 2022, proving that it not only survived but has become stronger than ever before.
However, to continue maturing, it must accomplish the following three things: Deepen its focus on consumer/retail transactions: Forget about "blockchain games"; the most authentic "game" in cryptocurrency right now is retail trading. Solana needs to innovate in protecting users from sniping attacks and combating "pump and dump" projects. Embrace TradFi: Since the goal is to be a "Nasdaq on the blockchain," it needs real stocks and bonds. Win the developer battle: Continuously provide resources to global developers to maintain a leading edge in technological iteration. We contrarian-buy Solana at the end of 2022/beginning of 2023, establishing a core position with a cost basis of $15.39, and exited with a profit of over 10 times by the end of 2024/beginning of 2025. Now we are patiently waiting for the next "perfect strike."
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Aaron