Solana sees declining user activity as memecoin rug pulls erode trust

Rug pulls and insider schemes involving Solana-based memecoins are driving investor outflows and a decline in capital inflows, as confidence in the sector deteriorates.

The rate of monthly capital inflow into Solana (SOL) and Solana’s MEME index turned to a monthly negative of -5.9%, according to a Glassnode chart shared with Cointelegraph.

This decline marks a significant drop from December 2024’s peak, largely due to reduced memecoin investment, according to CryptoVizArt, a senior analyst at Glassnode.

The analyst told Cointelegraph:

“The rate of monthly capital inflow into Solana has declined from December 2024 high to 2.5% per month, mostly due to the negative capital flow in MEME sector. However, Solana still has some positive momentum but it’s declining faster than Bitcoin.”

Solana’s price fell over 29% during the past month, while Ether’s (ETH) price fell over 15% and Bitcoin (BTC) fell 7%, Cointelegraph Markets Pro data shows.

Solana user activity is also in decline. The number of active addresses on the network fell to a weekly average of 9.5 million in February, down nearly 40% from the 15.6 million active addresses in November 2024.

This marks a significant cooldown for the blockchain, according to Glassnode’s analyst, who added:

“A significant cool down in Solana activity is evident, however, we are relatively higher than pre pre-bull market baseline of

The decline in investor activity has been linked to disappointment in recent Solana-based memecoin launches, particularly the Libra token, which was endorsed by Argentine President Javier Milei. The project’s insiders allegedly siphoned over $107 million worth of liquidity in a rug pull, triggering a 94% price collapse within hours and wiping out $4 billion in investor capital.