Standard Chartered has raised concerns that Solana may be becoming a “one-trick pony,” primarily driven by memecoin activity — a use case now seeing waning momentum, according to a new research report.
In its May 27 report, shared with Cointelegraph, the bank noted that Solana’s architecture — optimized for high-speed, low-cost transactions — has made it a dominant player in use cases requiring massive throughput, especially memecoin trading. However, this specialization may have unintended consequences.
“So far, most of Solana’s application revenue — or what the report refers to as its ‘GDP’ — has come from memecoin activity,” the analysts noted. While the memecoin craze helped stress-test Solana’s scalability, the speculative and volatile nature of these tokens poses risks to the network’s long-term utility. Now, with memecoin trading in decline, Solana could lose steam.
Memecoin Hype May Have Peaked
According to the report, the intensity of Solana-based memecoin trading has already passed its peak, and the combination of falling usage and extremely cheap transaction fees may not bode well for the platform’s future. Standard Chartered suggests that to remain competitive, Solana must broaden its focus to other high-volume sectors.
Potential areas for expansion include financial applications and consumer-facing platforms such as social media, where high throughput and low costs are crucial. However, the bank warns that building and scaling such ecosystems will likely take years, which could cause Solana to lag behind Ethereum in the short to medium term:
“We expect Solana to underperform Ethereum over the next two to three years before possibly narrowing the gap in real terms.”
Solana’s Competitive Advantage Is Eroding
Once celebrated for its speed and affordability, Solana is now facing intensified competition. The Dencun upgrade to the Ethereum network in March 2024 enabled its Layer-2 platforms to match Solana’s transaction costs, eroding one of Solana’s key differentiators.
The report also highlights that Ethereum’s modular architecture — which separates execution, consensus, and data availability — has given it a scalable path forward while maintaining decentralization and security:
“Ethereum can now scale transactions cost-effectively post-Dencun, while retaining the benefits of a highly decentralized base layer,” the bank noted.
In summary, Standard Chartered’s report underscores a turning point for Solana, as it seeks to transition from a memecoin-fueled boom toward broader adoption — a process that may determine its standing in the next evolution of the blockchain space.
