Is Solana really finished, or is this a massive contrarian setup?

Solana’s price has been brutal lately. After a huge run earlier in the cycle, SOL is now down roughly 80% from its all-time high and has just printed eight consecutive red monthly candles for the first time in its history. On the surface, it looks like the market has decided Solana is finished.

But when you dig into the data, you see a very different picture. Usage is near all-time highs, institutional products are growing, and key governance proposals could completely change Solana’s tokenomics. The question isn’t just “Is Solana screwed?” but “Is this one of the most obvious contrarian setups in crypto?”

The technical picture: historically ugly, historically oversold

From a chart-only perspective, Solana looks terrible right now. Eight straight red monthly candles is extremely rare for any major asset and has never happened before for SOL. Even during the FTX collapse in late 2022—when Solana’s largest backer imploded, the token crashed to around $8, and the entire ecosystem looked existentially threatened—the drawdown was more justified than what we’re seeing today.

What makes this move stand out is the Relative Strength Index (RSI), a momentum indicator that measures how overbought or oversold an asset is. On the monthly timeframe, Solana’s RSI has just printed its most extreme oversold reading in the asset’s history—more oversold than during the FTX crash. The daily RSI is also at extreme levels.

That does not guarantee the bottom is in or that price can’t go lower. It does mean that, historically, when major assets hit this kind of extreme oversold reading (and don’t go to zero), they tend to experience strong mean reversion over time. Right now, the market is pricing Solana as if it’s dying. The question is whether the fundamentals justify that view.

On-chain activity is surging while price bleeds

Here’s where the story flips. While Solana’s price has been making new lows, its network usage has been making new highs.

Roughly 600,000 wallets are sending at least 10 transactions per day on Solana, every single day. That’s not just bots spamming the chain—it’s a large base of active users doing real things with real frequency. Around 1.7 million users are returning to use Solana daily, and according to Artemis data, returning users recently hit their highest level since February.

In other words, people aren’t just testing Solana once and leaving. They’re coming back. They might have arrived for memecoins, but they’re sticking around for everything else the ecosystem offers.

Real revenue, real money, not just speculative TVL

One of the strongest signals in any crypto network is whether users are actually paying for services. On Solana, applications generated around $91 million in revenue in May alone. That’s not trading volume or total value locked (TVL)—it’s actual income from users paying fees, spreads, and protocol charges.

Stablecoin activity is also booming. Stablecoins on Solana have climbed to about $16.4 billion. That’s real money moving through the network, not just paper valuations. It suggests people are using Solana as financial infrastructure—for payments, trading, and settlement—rather than just a speculative casino.

AI agents are quietly choosing Solana

One of the most interesting data points is the rise of “agentic asset senders”—autonomous AI agents that interact with the blockchain without human input. On Solana, these AI agents recently hit about 69,300 in a single day, up from just 3,100 in April. That’s a 22x increase in a matter of months.

Why does that matter? AI agents need low fees, high throughput, and fast finality to operate efficiently. The fact that tens of thousands of them are choosing Solana during its worst price performance ever is a strong signal about where developers and builders see the best execution environment.

Infrastructure upgrades: Firedancer, Alphanet, and resilience

Under the hood, Solana’s core infrastructure is also evolving fast.

Firedancer, a completely independent validator client built by Jump Crypto, is now running in production on Solana mainnet. Until now, Solana effectively ran on a single client stack. Single-client chains are fragile: if that one implementation has a critical bug, the entire network is at risk.

Firedancer introduces genuine client diversity. Multiple independent clients mean no single point of failure, better resilience, and a more “institutional-grade” setup. On top of that, Firedancer is designed to improve performance significantly over time.

Alphanet (often referred to as Alphan or Alphanlow in early discussions) is another upgrade progressing through testing. It’s aimed at improving Solana’s speed and finality even further. Solana is already one of the fastest major chains; these upgrades are about making it even more efficient and robust as usage scales.

Institutions, RWAs, and ETFs are still coming

Despite the price crash, institutional and real-world adoption hasn’t stopped.

Real-world assets (RWAs) on Solana—things like tokenized treasuries, credit products, and other off-chain assets brought on-chain—now total around $2.59 billion, up roughly 15x year-over-year. That’s a serious vote of confidence from institutions building the next layer of financial infrastructure.

Spot Solana exchange-traded funds (ETFs) have crossed $1 billion in assets under management, with around $115 million in net inflows in May alone—a record month. That’s regulated, institutional capital flowing into SOL while many retail investors are capitulating.

Solana has also become the leading venue for new token listings and memecoin activity. Love it or hate it, memecoin culture drives user acquisition and attention. On top of that, Solana reportedly handles the vast majority of spot tokenized equities trading in crypto, even as competitors like Hyperliquid start to gain share.

If you want to dig deeper into how Solana has handled recent volatility, it’s worth reading our breakdown on why Solana crashed and what the data really says.

The tokenomics problem – and why it might change

For all its strengths, Solana’s tokenomics have been one of the biggest criticisms. Currently, SOL inflates at around 4% per year, with only a minimal burn mechanism. That steady issuance has been a structural headwind for price, especially in a risk-off market.

That’s why three governance proposals—SIMD-550, SIMD-553, and SIMD-547—are so important. If passed, they would fundamentally reshape Solana’s supply dynamics.

SIMD-550: Cutting emissions

SIMD-550 proposes roughly doubling Solana’s disinflation rate. In simple terms, it would cut more than $1 billion in annual SOL emissions at current prices. Less new SOL hitting the market each year means less ongoing sell pressure and a more sustainable supply schedule.

SIMD-553: Introducing a base burn

SIMD-553 introduces a base-case burn of around 2,850 SOL per day—roughly $200,000 at current prices, or about $73 million per year. As on-chain activity grows, this burn would scale up, removing even more supply from circulation.

Together, SIMD-550 and SIMD-553 could introduce net deflationary pressure for the first time in Solana’s history, especially if usage continues to rise. That would flip the narrative from “SOL constantly dilutes holders” to “network growth directly benefits holders.”

SIMD-547: Usage-driven burns

SIMD-547 adds another layer: activity-based burns via resource pricing. During periods of high demand, fees and resource costs would rise, and part of that value would be burned. The more Solana is used, the more SOL gets removed from circulation.

All three proposals together represent the most significant tokenomics overhaul Solana has ever attempted. If they pass, Solana’s supply dynamics could start to look much more like the models that the market has been rewarding in other ecosystems.

What could go wrong?

No serious thesis is complete without the bear case. There are real risks here.

Governance risk: The SIMD proposals are not guaranteed to pass. If they stall or get rejected, one of the biggest potential catalysts for Solana’s next leg higher disappears. The market could continue to discount SOL for its inflation and weaker token incentives.

Macro and market risk: Crypto as a whole is still in a choppy, risk-off environment. Even if Solana’s fundamentals improve, price can still go lower in the short to medium term. For many investors, dollar-cost averaging into strength (after signs of a trend reversal) may be more sensible than trying to catch the exact bottom.

Competitive risk: Solana doesn’t yet dominate perpetual futures trading, which is one of the most important battlegrounds for serious volume. Hyperliquid has built a strong lead here. If Solana can capture even 10–30% of that open interest via a strong on-chain perp DEX, it would be a big win—but there’s no clear, dominant contender on Solana yet.

Reputation risk from memecoins: The 2024–2025 memecoin cycle has been heavily associated with Solana. It’s where many celebrity and political tokens launched, including some notorious rug pulls and low-quality projects. For many traditional investors, that has reinforced the idea of Solana as a “casino chain.” Rebuilding that reputation will take time and consistent delivery from serious projects.

For more context on how Solana has behaved around previous drawdowns and potential downside levels, you can also check our guide on whether Solana could drop further before it becomes a strong buy.

So… is Solana actually screwed?

Right now, the price action is screaming “trouble.” Eight red monthly candles, an 80% drawdown, and record oversold readings are enough to scare almost anyone out of a position.

But underneath that, the data tells a very different story: record or near-record user activity, rising stablecoin flows, rapidly growing AI agent usage, major infrastructure upgrades, billions in real-world assets, and growing ETF inflows. On top of that, governance is actively working on turning SOL from an inflation-heavy asset into one with credible deflationary mechanics tied directly to usage.

No one knows exactly where the bottom is. But when investors look back in two or three years, this period may end up looking like one of the most obvious accumulation windows Solana has ever offered—if, and only if, the ecosystem continues to execute, the tokenomics proposals pass, and Solana secures meaningful share across key verticals like DeFi, RWAs, AI, and derivatives.

For now, Solana is deeply uncomfortable to buy—and that’s exactly what a true contrarian setup is supposed to feel like.