Solana registered $102.4 billion in trading volume in February, leading the market despite a 60% monthly decrease. The shrinking volume relates to the cooling off of the memecoin frenzy following the LIBRA token fiasco.
Despite the falling volumes, Solana registered over $100 billion in volume for the fourth consecutive month. It amounted to over $260 billion monthly trading volume in January, besting its previous record of $120.5 billion by over twice.
The total on-chain trading volume decreased by nearly $200 billion last month, with most major blockchains registering losses, except Binance Smart Chain (BSC). BSC had a trading volume of $81.1 billion, just $600 million short of January.
However, it was not enough to beat Ethereum for second place, with a trading volume of $100 million above BSC last month.
Memecoin trading shrinks
According to Blockworks data, memecoins composed nearly $206 billion in Solana’s monthly trading volume in January, representing 79%.
However, the volume fell sharply in February, totaling $99.5 billion. Nevertheless, it still represented 97.1% of Solana’s monthly trading volume.
The numbers highlight how Solana’s trading activity relies heavily on memecoins, a sector heavily affected by the LIBRA token incident.
On Feb. 14, Javier Milei, President of Argentina, endorsed the memecoin, claiming it was a way to fund Argentinian ventures.
After his tweet, the token jumped in price and achieved a $4.5 billion market cap. However, LIBRA’s price crashed by 95% in the following two days.
In addition to the frustration tied to the debacle of a president-endorsed token, the episode raised questions regarding insider trading activity, as a report by Nansen pointed out that two wallets profited over $10 million from buying the token after Milei posted about it.
Moreover, memecoins registered a nearly 46% average drawdown in February, as the crypto market posted an average retraction of 37% per Artemis data.
Notably, the end of the memecoin frenzy still hurts Solana in March, as Ethereum took the lead in monthly trading volume so far after trailing behind for five months.
