Is Solana’s crash the end or a new beginning?

01. Is the recent collapse of Solana the end or a new beginning?

1.1 Value Targets on Solana

It is only a matter of time before Sol is approved through ETF, which will be in May or June .

As Trump's tokens on Solana reached a market value of 14 billion U.S. dollars, Solana/TR UMP also began to break out of the circle. When Trump gradually reached ATH, all of your friends outside the circle may have asked how to buy Trump and Solana. It was also on that day that Moonshot, as a very web2 user-friendly crypto broker, achieved a historical ATH in revenue, with a single-day revenue of 6.3 million U.S. dollars.

As Trump/Solana gradually breaks through the circle at the retail level, the launch of SOL ETF is also in full swing. As of February 27, 2025, the latest progress of SOL ETF is that it has been listed on DTCC (just when I was writing this article, the news reported that SOL ETF was listed on DTCC). DTCC (Depository Trust & Clearing Corporation) is the largest financial transaction back-end service agency in the United States, responsible for the centralized custody and settlement of securities such as stocks and bonds, and provides settlement and custody services for major exchanges including NYSE and Nasdaq. When a commodity or security is listed on DTCC, it means that it is included in the centralized custody and settlement system of DTCC. This does not directly mean that the commodity or security will definitely be listed on Nasdaq.

But it is worth noting that the first BTC ETF was listed on DTCC on October 23, 2023, and the subsequent BTC ETF was listed on Nasdaq on January 11, 2024 (two and a half months); the first ETH ETF was listed on DTCC on April 26, 2024, and the subsequent ETH ETF was listed on Nasdaq on July 23, 2024 (3 months).

Therefore, we continue to hold our consistent view that SOL’s adoption of ETF is not a yes or no, but a “when”. The time should be 2-3 months later, and in mid-May to June.

Pump.fun remains one of the best cash flow decentralized companies in the cryptocurrency world.

Pump.fun was born in early 2024, and began to have a certain trading volume in mid-2024. It began to explode after October 2024. Pump.fun is a one-stop meme coin launch platform. After users create tokens, they only need to pay a fee of 0.02 SOL to mint tokens and add them to the Pump.fun market immediately. Pump.fun uses a bonding curve to define prices. The more user coins buy, the higher the price will rise along the predefined curve. 100% of the tokens are sold through the curve to ensure that there is no unfair advantage. This model eliminates the need for creators to provide initial liquidity and reduces financial barriers. Meme coins on Pump.fun can be traded within the platform, and users can buy and sell tokens at any time according to the joint curve model. Once the market value of the token reaches 100k, the token will automatically migrate to Raydium (but now it is found that Pump.fun has deployed its own liquidity pool and started to seize the Rayidum market). The liquidity will then be deposited in Raydium and 17% of the liquidity tokens will be burned.

As of February 27, 2025, at a price of $140/sol, the first-year revenue is approximately $574 million, making it one of the most successful products in the crypto industry.

Before 21 years, the growth path of VC coins was usually to seek VC financing, issue coins on the exchange while going on the mainnet, and then slowly start doing business after having coins. After 21 years, the model has become to raise funds while developing, then issue airdrops, go on exchanges, and continue to do business. The problem is that after the collapse of FTX, only Binance is the only one, which has led to the complete loss of the bargaining power of the project party in the past. After all, if you don’t go on Binance, you won’t have the best liquidity. The project party needs to give a large number of tokens to Binance/BNB Holder. As a result, there will be huge selling orders for projects listed on Binance in the early stage, which come from airdrops/project parties/market makers, etc., so retail investors have no way to make money in the secondary market. In order to deal with the above problems, the project party can only continuously increase the valuation in the primary market, in exchange for only 2%-5% of the tokens to Binance.

In the past, the crypto market attracted retail investors the most because of the secondary wealth-making effect. In 2021, you can make money by buying anything on Binance, and VC coins can increase several times. But since the valuation of the primary market is too high, retail investors can no longer make the profits they want in the secondary market, so they will not participate at all (of course, shorting at high valuations can also make money).

Therefore, the popularity of Meme coins has gradually increased since the end of 2024, reaching its peak at the beginning of 2026. Putting aside the cultural/cult/communication perspective, from the perspective of retail investors, the advantages of Meme are: 1. 100% full circulation, no apparent selling pressure of VC coins; 2. The market value of early participation is low enough, and the odds are extremely high; 3. It can change fate, in the crypto market it is a turnaround, not a doubling; 4. It is also gambling, why should I take on your VC opening project that is so expensive?

If you trade 1 sol in the inner market of pump.fun with less than 100,000, once the meme coin can be traded to 10m, it will be a 100-fold profit, that is, 100 sol; if it is traded to 50m, it will be a 500-fold profit. Not to mention that pumpfun also has god-like markets such as act/pnut, which has created the myth of meme benefiting sol. The behavior of retail investors playing the inner market of Pump.fun is like the operation of VC investing in early-stage projects.

Pump.fun is a product that amplifies the gambling nature of human nature. Especially in the midst of mass madness, when KOLs shout orders, users will only buy without thinking about the meaning of the token itself and the chip structure behind it. In the context of raydium and pumpfun taking commissions, the negative-sum game leads to very few users being able to make a profit. However, the casino does not need to let half or 80% of the users win money. Only a very small number of users are needed to have a very high benefit effect. The casino only needs to make retail investors feel that they can make money and have the possibility of getting rich. In such a small trial-and-error casino, it is difficult for retail investors to lose all their money. Retail investors will continue to gamble again and again after failure. Under the negative-sum game, the exchange and the team that issues the plate are the biggest winners.

As Pump.fun starts to engage in dex, Raydium's market share may gradually decline

The original top dex on Solana is Orca, and the trading model of Orca is more mainstream tokens on Solana, such as Sol/Bome, etc. But since Pumpfun and Raydium were bound, Raydium has become the main battlefield of meme. In addition, it can be seen that the liquidity on Solana is mainly occupied by Raydium/Orca/Meteora.

After the internal trading of Pump.fun ends, meme coins will be traded on Raydium. In January 2025, the index of dex to cex trading volume reached nearly 20%, breaking through the 15% ceiling we mentioned in the past. According to our annual report, meme coins are actually grabbing the market share of mid-to-tail VC coins. Especially after the Trumps issued meme coins on Solana, the market share of dex on Solana has further increased. In December 2024, the market share of raydium (solana) vs uni (ethereum) was 19% vs 34%, but on January 20, Raydium's market share was on par with Uni, both at 25%. In the recent week of Trump trading, Raydium's market share even exceeded Uni at one point.

Raydium charges 0.25% for each transaction, of which 0.22% belongs to LP and 0.03% is used to buy back Ray. Ray has more utility than Uni. Due to regulatory issues, Uni only has the function of governance, while Ray can also be used to pay transaction fees and IDO functions, and 12% of the fees generated by Raydium's transactions are used to buy back Ray.

From April 1 last year to date, the tokens launched from Pump.fun have contributed $346 billion in trading volume to Raydium, accounting for half of the total traffic of the DEX. Of the $197 million in fees collected by the platform, $104 million came from pump.fun transactions.

Now Pump.fun may test AMM internally, which means that Raydium’s uniqueness no longer exists. In fact, we have always been wondering why Pumpfun does such a profitable business by itself, and needs to share the most profitable profits with Raydium, which is very unreasonable.

The token utility of JUP+JLP is very good, and it is recommended to continue to pay attention

Jupiter is the largest perpdex and spot aggregator on Solana. Jupiter's core businesses are: 1. dex aggregation; 2. perp dex; 3. DCA; 4. limit orders. Jupiter does not charge users any fees in spot aggregation transactions, but charges a 0.1% platform fee in Limit and DCA businesses. From the trading volume in the figure below, it can be seen that Perp dex trading volume is the main revenue contributor. In perpetual contracts, Jupiter earns 0.06% of the user's AUM of opening and closing positions as a source of income, followed by liquidation fees. Secondly, Jupiter launched the JLP pool, allowing users to inject liquidity into the pool to become LPs and bet against retail investors. Jupiter's transaction fees and part of the retail liquidation fees are deposited in the JLP pool, so the value of the JLP pool is constantly rising. The token utility of JUP is also constantly improving. Currently, 50% of the JUP protocol fees are used to repurchase JUP, which brings a certain price guarantee to JUP.

JLP can be seen as betting against retail investors in the contract, earning fees and users' profits/losses. According to the law of large numbers, a contract exchange that can still blow up in a negative-sum game will always make money as long as the time is extended. JLP decentralized the original CEX contract exchange model, allowing retail investors to add liquidity to the pool and bet against other retail investors who play contracts. As long as the time is extended, they will definitely make money. After all, if the time is short, LPs may also lose money in the event of a black swan event. JLP is actually a very good financial scenario. Excluding the increase in the assets in the asset pool (the increase in SOL ETH BTC in one year), the asset appreciation brought by the pool's handling fees + funding rate + user net losses has also reached an annualized 44.11%.

1.2 Will the collapse of Meme bring about a counterattack from VC coins?

Since the end of January 2025, BTC has fluctuated downward from a high of $110,000. On February 26, it plummeted by more than 6% in a single day to $88,189. The price of SOL was also under pressure, driving the Meme coins on the Solana chain (such as BONK and WIF) to fall by more than 30% in a single day.

pump.fun The number of newly added tokens per day has dropped from 60,000 to less than 30,000, partly due to the market's fatigue with the "one-click coin issuance" model. The proportion of new coins that successfully "graduate" (reach the liquidity threshold) has dropped from 1.5% to 0.8%, reflecting the accelerated elimination of low-quality projects by the market. Only a few projects can survive after the withdrawal of speculative funds.

On January 18, the Trump family issued coins (TRUMP, MELANIA) which triggered market carnival and controversy. The opening price of TRUMP coin was $0.1824, and it rose by more than 43,860% to $80 within 48 hours. Celebrity endorsement became the core driving force of the short-term surge in Meme coins.

On February 15, Argentine President Javier Milley publicly supported a meme coin called $LIBRA on social media, saying it was designed to support small businesses and economic development in Argentina, and attached the token contract address. The token price soared to $4.96 within half an hour, and its market value was close to $5 billion, but then it plummeted 85% due to the team's large-scale cashing out (about $107 million), and the price fell below $0.6, causing heavy losses to investors. The incident triggered global doubts about "political meme coins", and the market was worried that celebrities would abuse their influence to harvest retail investors in the absence of supervision.

Several leading Meme tokens that once dominated the hot spots have fallen sharply from their historical highs, with a general drop of more than 80%.

AI16Z (AI Agent leader): plummeted from $2.49 to $0.34 (-86%), mainly due to the decline in market enthusiasm for AI Agent narratives.

AIXBT (Crypto Intelligence Platform): Fell from $1.06 to $0.21 (-80%). Despite the support of whales adding positions, the sector’s correction and shrinking liquidity put pressure on prices.

SWARMS (decentralized AI network): A 90% drop (0.63 → 0.06 USD), reflecting the market’s rejection of AI concept tokens that lack practical use cases.

Trump Family Coin (TRUMP, MELANIA): TRUMP fell from $85 to $13 (-85%), and Melania Coin plummeted by 95% (18→0.86 USD), mainly due to regulatory doubts and the bursting of the bubble after the dispersion of traffic.

AI Agent and other early hot spots have entered the "squatting period". Most leading tokens rely on traffic speculation and lack technical support. Once the community's enthusiasm declines, they will face the risk of collapse. This round of plunge confirms the "violent rise and fall" characteristics of Meme coins. Investors need to be wary of "narrative tokens" with no real value.

With the characteristics of "both rising and falling fiercely", investors need to be wary of "narrative tokens" with no real value. Quit while you are ahead, try new things instead of old ones, and have different beliefs, which are the essence of Meme coins on the chain.

There is a view that since pumpfun became popular, there has been no innovation in new tracks in this industry. In the past two years, fewer and fewer founders have told the world that they use blockchain to change the world, and more and more founders have admitted that this track is a big casino. Maybe the final result of inventing a new track and issuing a new CA is the same, both are drawing Christmas trees, but the Christmas tree of the new track will be smoother, and the Christmas tree of CA is a rapid rise and fall. Three years ago, the team invented a new track and told a new narrative. Now it is different, now just issue a new CA.

But now that PumpFun’s traffic and popularity seem to have ended, will this give the real team a chance to do something? Let’s wait and see.

02 New Chain War is beginning

2.1 Berachain

Berachain is the public chain with the fastest TVL growth in recent times. Its TVL has rapidly increased from the initial US$500 million to the current US$3.2 billion, thanks to its unique POL (proof of liquidity) consensus.

POL mainly involves three tokens:

1. Bera, native gas token, gas fee token and staking token

2. BGT, governance token, is a SBT+reward token that can be converted into Bera in one direction (bera cannot be converted into BGT). After users participate in Berachain's DeFi, they will receive BGT rewards, and then users can choose whether to convert into Bera.

3. Honey, a stable currency. You can deposit collateral into the vault to create Honey, and the BGT hodler will govern the vault.

POL is different from POW/POS/POH. It rewards the contribution of DeFi liquidity providers, which will reward users who participate in the system more. POL can bring very strong ecological growth to the early stage of the project. But this is also a double-edged sword. The inflation rate of BGT in the first year is 10% of the total supply, which will bring 50 million BGT to the market. Considering that all BGT will circulate in the market, combined with the current circulation of 107 million Bera, it will bring up to nearly 50% additional circulation to the market. Since BGT is in the hands of large DeFi participants (such as early teams, key partners), there are few BGT in the hands of retail investors, so large investors will bring potential serious selling pressure-this is not groundless. DevBear, co-founder of Berachain, sold tokens on a real-name address. He received about 200,000 BERA from the airdrop (which is not reasonable in itself, because the airdrop rules were set by them), and then he exchanged some tokens for assets such as WBTC, ETH, and BYUSD.

Therefore, we will not make too aggressive predictions about Bera’s price, but we are optimistic about the rapid growth that its POL will bring to the ecosystem.

If Bera becomes popular with KOLs and big investors in the future, it may become a classic Christmas tree + see who runs faster scenario.

2.2 Sonic

Another public chain ecosystem worth paying attention to is Sonic. Sonic's TVL soared 8 times in one month, rising against the trend when the market was sluggish. The APR of major DeFi mining pools remained high, forming a double cycle of currency price and APR.

Soinc was once the public chain Fantom. In the last cycle, with the DeFi projects such as SpookySwap, Beefy Finance, and Scream brought by Andre Cronje, the market's attention to the Fantom ecosystem was triggered. At the same time, Andre Cronje also became the manifestation of Fantom's public chain IP and influence. With AC's return to Sonic, what is different from four years ago is that AC has brought a new gameplay: x(3,3).

x(3,3) is fully reflected in ShadowExchange. Users can pledge SHADOW to obtain xSHADOW. However, the user's redemption share will change over time. If it is unlocked within 15 days, it needs to be exchanged at a discount, and it can only be fully exchanged 1:1 after 60 days. The discount rate decreases linearly during this period.

Since immediate exit requires a 50% loss, the loss is shared by the remaining stakers. This model allows long-term stakers to obtain: 100% of the protocol fees, voting rewards, and other exit rewards. The x(3,3) model not only attracts the capital of long-term stakers, but also solves the exit problem of ve(3,3).

After DeFi led the capital to return, Sonic also started meme marketing. Although AC himself said that he had no good feelings towards memes, he still held a meme contest. For example, the community mascots GOGLZ, TinHatCat, and AC's cat all experienced explosive growth in coin prices with the prosperity of Sonic. However, unlike the meme coins in Solana and Base ecosystems, the memecoin in Sonic relies more on ecological subsidies and competition marketing, and does not have a general market consensus. We believe that Sonic meme is just a short-term speculative target.

At the same time, NFTs in the Soinic ecosystem have also brought significant wealth effects. The core NFT in the Sonic ecosystem is Derp, which has a strong consensus in the Soinc team. AC also changed his FateAdventure avatar to Derp. 10K paid attention to Derp when the floor price was 600S, and it has soared to 2300S as of February 28.

In addition, Game is also a key sector of Soinc ecology. Its representative projects are FateAdventure, Sacra, and EstforKingdom. Its related tokens $FA, $SACRA, and $BRUSH have all seen different degrees of sharp increases.

Sonic public chain relies on DeFi to attract TVL and has a complete ecological application. Token S is a good β target. After the market correction, the market value fell back to around 2.3 billion, and it is still worth building a position. The α assets in the Soinc ecosystem are DeFi: Shadow, NFT: Derp, Meme: GOGLZ and Game: FA.

2.3 Sahara

Sahara AI is our first round of investment in the ai x crypto project in 2023. Sahara is building a platform where anyone can monetize AI models, datasets, and applications in a collaborative space. Users can manually train models without permission, provide training data, and create customized AI models using no-code tools.

Sahara has some interesting data to share on its business recently. In the past, we would charge whether the quality of data generated by decentralized data annotation can meet the data needs of large models. From the data of Sahara Test season1, we can see that although the acceptance rate of high-level tasks is only 10%, they still generate more than 24,000 high-value data points that are critical to testing the security and robustness of AI models. The low acceptance rate of these tasks shows that it is difficult to curate high-quality, domain-specific datasets. These tasks require contributors to generate edge adversarial inputs designed to test the boundaries of LLM. In general, Sahara improves data quality through measures such as automatic checking and marking of low-quality submissions, decentralized peer review, machine review of complex binary characters, and final Human QA review. Sahara will launch Test Season 2 in the future to continue to expand data annotation content.

In addition, Sahara launched the Sahara Incubator Program. The program aims to discover and support the world's most promising AI x Web3 innovation projects, and provide selected teams with a full range of resource support, including in-depth technical guidance, ecological integration, and financing acceleration services, to help the long-term development of AI native projects. As a pioneer in the intersection of Web3 and AI, Sahara AI is committed to building a collaborative economic AI blockchain platform, focusing on the research and development of AI infrastructure and intelligent applications in the long term, and promoting decentralized innovation in AI through blockchain technology.

The incubator program will focus on two tracks: AI infra and AI application. Teams with MVP and above maturity are welcome to participate. Successfully selected projects will have the opportunity to fully access the Sahara AI ecosystem, obtain exclusive technical support and market development resources, and will also provide investment opportunities to help teams connect with investment networks and jointly create the next generation of AI x Web3 products.

03Guidelines for the subsequent primary market

1. The only consensus of the Hong Kong Consensus Conference is that it is necessary to invest in projects with business models. The most different feature of this cycle from the previous one is that projects have emerged. In addition to selling coins, stable business models have emerged. At present, it seems that transaction-related (cex/dex, lending, perp, brokers, wallets), asset management (earning volatility), stablecoins (chips for transactions + cross-border payments), and new public chains (new casinos, also transaction-related) are evergreens of blockchain. These tracks have shown strong revenue growth in 2024. We will not go into the revenue of newcomers such as Pump.fun/Ethena here, but non-giant startups such as Solv (Bitcoin asset management), Particle (dex), and Moonshot (brokers) can also achieve an annual revenue of more than US$10 million after one year of entrepreneurship in a new direction, which has begun to prove the revenue capacity of cryptocurrency companies.

   
   

2. As the business competition cycle in the "cryptocurrency circle" lengthens, the requirements for entrepreneurs will also become higher. Now it is not enough to have vision alone, but also leadership, to make correct decisions continuously over a long period of time, and to be able to build an efficient organization.

   
   

3. Return to "People game, people first", increase the weight of "people", and focus on three things: whether making the right decision at the critical moment is the result of luck or thinking, whether one is good at building an efficient organization, and the tenacity to climb out of the trough.

   
   

4. Make counter-common sense decisions, find excellent counter-common sense founders, and stay away from collective projects. Cyclic fluctuations are fatal to unstable team organizations.

   
   

5. Product experience comes first, and then think about what track and products the blockchain industry will need in five years.