Has SOL Bottomed Out? Multidimensional Data Reveals the True Picture of Solana

Original Article Title: Time to Call the SOL Bottom?

Original Article Author: blocmates
Original Article Translation: Ding Dang, Odaily Star Daily

The third quarter of 2025 was a tale of two sides for Solana, all on the same chain. On the surface, the "Meme Downturn" brought about a significant cooling-off period: daily active addresses decreased, and Solana's user-centricity was gradually eroded by competitors. However, beneath the surface, the fundamentals of this chain became increasingly solid. The Solana core team continued to maintain a high frequency of iteration, driving forward one of the most ambitious technical roadmaps in the crypto industry; at the same time, its TVL grew by over 26% in the third quarter, and stablecoin supply almost tripled since the beginning of the year.

This report will systematically review the core technical upgrades that are defining Solana's future (such as Alpenglow, Agave), deeply analyze on-chain data performance, the health of ecosystem applications, and summarize our key insights on how Solana can solidify its position as the "default high-performance public chain."

Parallel Technical Innovations

While most users of the platform are busy chasing the latest meme emojis, the @solana core team has been advancing an ambitious set of system-level upgrade routes. This is not a patch-up of a single metric but a comprehensive system engineering effort to enhance network performance, security, decentralization, and user experience. These upgrades can be broadly categorized into three main types.

Category One: Core Engine (Consensus and Client)

This involves a fundamental transformation of Solana's "engine," aiming to enhance performance, speed, and security from the most basic level. Here is a great visualization chart, and if you're curious, you can learn more about the current staking ecosystem.

Category Two: Network Highways (Throughput and Efficiency)

The focus of this work is to widen the network "lanes" after enhancing the underlying performance, optimizing traffic scheduling to withstand future higher loads without congestion. If there is a hope for institutional users to truly onboard in the future, low latency and a stable experience are foundational, not optional.

Category Three: Destination (New Ecosystem and Application-Layer Capabilities)

This category of upgrades is aimed at the most direct developers and end users, with the goal of providing more new features, supporting new types of application formats, and further enhancing the decentralization of the chain. In other words, this is the module that allows the "chain to do more."

Practical Impact of Technical Improvements

From a practical usage perspective:

· Alpenglow: Sub-150ms final confirmation speed enables retail users to use high-frequency DeFi, gaming, or micropayment applications on-chain, with performance approaching the levels of Binance (100ms) and Aptos (200ms).

· Firedancer: Potential capacity exceeding 1 million TPS far surpasses Ethereum and its L2 solutions (such as OP's ~2k TPS), Sui's 300k TPS, and centralized exchanges (Coinbase peaks around 500k TPS). It also significantly reduces systemic risks of single-client failures (Ethereum's Geth still accounts for 60% of nodes).

· Block Space Improvements, Congestion Alleviation, and Transaction Size Limits Optimization: Enhancing the overall experience of using the chain, enabling finer-grained microtransactions, ICOs (like $PUMP), and fast transactions, while reducing failures due to congestion.

· Decentralization and Node Cost Reduction: Allowing users with lower technical barriers to run nodes, thereby enhancing the security and decentralization of the entire network.

· ZK and Privacy Support: Providing a compliant, private, and secure foundation for the entry of RWAs and institutional users.

· BAM (Fair Trades, MEV Resistance): Ensuring transaction fairness and protecting users from MEV losses, making the on-chain experience closer to an expected low-cost CLOB environment.

· ACE (Multi-Collateral Liquidity Event): A further push to deepen the DeFi capital markets, enabling them to compete with platforms like Aave, and support more complex financial instruments.

PUMP ICO: On-chain Stress Test Validation

In July 2025, Pump.fun's ICO served as a real "stress test" to validate Solana's performance. @pumpfun managed to raise $500 million and $1 billion through on-chain and centralized exchange in just 12 minutes, reaching a valuation of up to $40 billion. During the event, 3,878 investors transparently participated in the purchase on Solana's DEXs like Raydium and Jupiter, while some CEXs (such as Bybit) experienced delays due to API failures, causing approximately 2,500 confirmed contributors to miss out on placing orders promptly and necessitating refunds.

Does this signify that we are witnessing a potential future scenario where the performance of decentralized blockchains begins to surpass that of centralized exchanges?

So, Where Does Solana Stand Now? The Truth Revealed by Data

From a data perspective, as traders shift from meme speculation to perpetual contracts, Solana's on-chain revenue metrics have been significantly impacted: the on-chain fees as a percentage of SOL's market cap have dropped by over 60% since the July peak.

Meanwhile, despite the ongoing discussions of stablecoins on Capitol Hill and Wall Street, the leaders remain Ethereum and Tron, with Solana alongside Base, BSC, Arbitrum, and other chains in the "second tier."

Further dissecting the stablecoin TVL share reveals that Ethereum and Tron have nearly always dominated over the past few quarters, while some emerging application chains—such as @Plasma—have started gradually breaking into this landscape.

Nevertheless, Solana still provides a fast, low-cost, and liquid USDC usage environment, which may be why Western Union chose to build its stablecoin business on Solana.

“Experimental” will be one of the core themes of this report, and this spirit is also reflected in the stablecoin ecosystem: new projects are gradually eroding USDC's dominant position, bringing more competition to the Solana stablecoin landscape.

Which ecosystem participants are driving chain growth?

From the TVL growth perspective, staking products were an absolute highlight in Solana's third-quarter applications, with Binance and Bybit's staking of SOL and @Sanctumso's products all seeing over 50% growth in the third quarter.

In contrast, DEX, DeFi, and infrastructure products, although TVL has also risen, have not surpassed SOL's own 28% increase—meaning that in terms of SOL valuation, these categories were actually net outflows in the past quarter.

The downside of staking products is their weaker profitability: on average, a staking protocol needs 21.7 times the TVL to reach the average revenue level of DEX in this sample. This once again demonstrates a fact— in the crypto world, speculators contribute far more profits than savers.

In the DEX race, @Orca_so has always maintained a leading position in TVL efficiency (i.e., “trading speed”). For a given level of liquidity, Orca has the highest trading frequency per dollar.

While Solana has always been known for being "fast and cheap," that doesn't mean there are no exceptions. For example, some high-frequency power users have found that their average daily fees on trading platforms like @tradewithPhoton or @AxiomExchange far exceed expectations.

However, for the vast majority of users, using the most common applications on Solana costs only a few cents a day.

Comparison of Solana and Core Competitors

Total Value Locked (TVL) was slightly below the historical high of nearly $180 billion in 2021 at the end of the third quarter. However, when comparing the various competing public chains, the quarter-on-quarter TVL changes are actually quite limited.

The market share chart below clearly shows how the TVL of these competitors fluctuates in sync each week. As Newton said, "Capital, if not idle, is often idle," and once capital is entrenched, large-scale migration is often difficult to achieve.

In terms of user base, Binance Smart Chain captured the most attention in the third quarter with a perpetual DEX linked to CZ—Aster. Many users either chose to exit in early summer or migrated from Base and Solana to BSC.

While Solana saw significant user growth in the second quarter, its share also declined in the third quarter, almost in sync with the waning market interest in meme trading.

However, it is worth noting that due to the surge in interest in stablecoins, Solana's stablecoin supply almost tripled from the beginning of the year to the end of the third quarter. Indeed, "fast and cheap" is a major selling point to attract users to use stablecoins, especially against the backdrop of Solana's mature DeFi ecosystem.

While these metrics paint the current picture, they do not necessarily reflect the future direction. Solana's identity has always been that of an "experimental chain." To understand the future use cases and narratives, we must observe where funds are flowing into new experiments.

VC Fund Flows: Which Projects Are Getting Funded?

Here are some Solana projects that received funding from notable institutional investors in the third quarter:

· @raikucom: Completed a $13.5 million seed round in September 2025, focusing on real-time liquidity scheduling and cross-chain bridging on Solana. It caters to high-frequency trading applications, supports sub-second settlement, and mitigates MEV risk. The round was led by @PanteraCapital, and the funds will be used for mainnet upgrades and further integration with DEXes like @JupiterExchange.

· @bulktrade: Closed a $5 million seed round in August 2025, offering an institutional perpetual DEX that emphasizes gasless batch execution, with single trades of up to $10 million. The round was led by @robotventures and @6thManVentures, with Solana co-founder @aeyakovenko participating as an angel investor. Its alphanet testnet went live in the third quarter.

· @meleemarkets: Concluded a $3.5 million pre-seed funding round in July 2025, combining DeFi with social prediction in a gamified prediction market protocol where users earn rewards through accurate predictions. The round was led by @variantfund and @dba_crypto, with the funds allocated for oracle integration and mobile app launch. The project secured the second position in the Solana Breakout Hackathon.

· @hylo_so: Wrapped up a $1.5 million seed round in September 2025, presenting a decentralized stablecoin protocol on Solana that issues yield-bearing stablecoins (e.g., sUSD) through overcollateralization and an auto-rebalancing mechanism. The round was led by @robotventures, with participation from @SolanaVentures. The funds will be used for mainnet deployment and integration with lending platforms like @Kamino.

Where Are the Opportunities and Risks?

In the third quarter, Solana displayed a state of "breakthrough with challenges." On one hand, innovative applications are continuously approaching product-market fit, and Digital Asset Treasury (DAT) companies are also shining brightly; on the other hand, the entire ecosystem has had to face some tricky issues.

Standout Projects in Q3

Among the numerous dApps that emerged in this quarter, the following projects that have gone live are particularly notable:

· @Titan_Exchange is a new DEX aggregator launched in Q3, utilizing an improved algorithm to extract depth from different liquidity pools with machine-level precision to obtain the best price, outperforming existing similar products in 80% of cases.

· @DefiTuna is a new DeFi AMM launched in Q3, integrating a true on-chain limit order mechanism directly into the AMM design, avoiding security risks associated with off-chain matching and allowing LPs to leverage their liquidity positions up to 5x (leveraged yield).

· @xStocksFi tokenizes stocks custodied by a licensed broker, enabling crypto users to easily access the economic rights of their underlying stocks; it launched in early Q3, with a single-quarter trading volume exceeding $800 million and a market share of approximately 60%.

· Pump.fun (streaming + mobile) initiated a token buyback in Q3 and relaunched its live streaming feature after facing significant selling pressure previously, with a cumulative buyback size reaching $1 billion by the end of the quarter.

· @MetaDAOProject made headlines due to large-scale oversubscribed projects such as Umbra. Projects launched through MetaDAO will have legal, economic, and governance rights embedded in their tokens, known as "ownership coins." Additionally, its governance proposals are not decided by voting but by pricing through "futarchic markets," allowing participants to express their views with real money.

DAT Development Update

In Q3, Solana's DAT in the ecosystem raised approximately $4.25 billion through private placements, PIPEs, and equity issuances, with Forward Industries (FORD) being the largest; around $3.5 billion was used to purchase 14.5 million SOL, accounting for 2.3% of the circulating supply of SOL.

However, Solana DAT still couldn't escape the mNAV contraction pressure that was prevalent in the third quarter of the crypto DAT ecosystem.

Addressing Common Criticisms

Like almost all crypto projects, Solana itself is in a continuous evolution phase and is far from perfect. From our perspective, the following criticisms are more of growing pains in the process of maturation but are still worth noting.

Main Risk: Brand Narrative

Solana's longstanding tag has been "the best place for experimentation." Trading bots, ICM, consumer apps, AI agents—where did these innovations first emerge? Solana.

However, in this cycle, attention has become increasingly scarce, and projects that find product-market fit seem to only focus on a few tracks and very few applications. This stagnation has allowed competitors to seize the narrative:

· Perpetual contracts have migrated from applications on a general chain to applications specialized chains like Hyperliquid;

· Base, through Base app and Zora, has deeply bet on the consumer app narrative, an area that was once Solana's strength;

· Stablecoin chains like Tempo, Plasma, Stable, Arc continue to threaten Ethereum and Tron's stablecoin dominance.

This also leads to the core risk: yes, Pump is a revenue machine and has indeed resisted competition from the "external" (Base/BSC) and "internal" (BonkFun), but the unintended consequence of this success is the potential for Solana's brand to be permanently locked into a "casino chain" narrative.

To reverse this trend, Solana must drive a new narrative. Perhaps the answer is still Pump, but through its live platform; perhaps it is the "exit-scam-proof ICO" and new governance structure proposed by MetaDAO; or maybe it is Toly's experimental approach with a personal touch, targeting Hyperliquid. The ecosystem needs a new story that can dilute the stigma brought by "sub-second holding retail investors."

Our Outlook on Solana's Future

Despite a slight market downturn following the end of Meme Season, the significance of short-term price fluctuations is diminishing. Solana has established a strong position and is poised to endure in the long term.

The newly launched high-performance blockchains (such as Sui, Aptos, Sei) have not posed a substantial threat to Solana as they did in the previous cycle when Solana challenged Ethereum. Even though some competitors may have stronger theoretical technology, Solana is already "fast enough, cheap enough," offers a good user experience, and supports a large ecosystem.

Technical capabilities and smooth user experience are the foundation of adoption. Solana is not resting on its laurels but is continuously iterating rapidly (as detailed in the earlier upgrade section of this report) to solidify its position and expand its capabilities. For these reasons, developers still consider Solana their preferred high-performance option, and we believe this trend will not reverse.

Solana embodies the spirit of the crypto space – "daring to try, open competition, extreme market orientation" – and is the best arena to validate product-market fit. Regardless of where this cycle leads, Solana has the prerequisites to survive and continue to thrive. Even though some transaction volumes may flow to application-specific chains, we still believe Solana will maintain its leading position in the general-purpose chain space.

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