Hyperliquid rises! Solana fees share falls by 50%, derivation rewrites the L1 landscape.

This year, there has been a huge change in the fee model generated by major Layer-1 blockchains. At the beginning of the year, Solana accounted for more than 50% of the trading fees on major L1 platforms, but now it only accounts for 9% of the total trading fees, a decline of 82%. The main reason for this drastic drop is the fierce competition from Hyperliquid and BNB Chain.

Solana from king to lost, cost ratio plummets 82%

(Source: The Block)

Earlier this year, Solana was the undisputed king of L1 fees, holding over 50% of the market share. This dominance was built on the memecoin frenzy from late 2024 to early 2025, when platforms like Pump.fun made it easy for anyone to issue tokens, sparking a global speculative craze. Solana's high throughput (handling tens of thousands of transactions per second) and extremely low fees (usually below $0.01) made it an ideal platform for memecoin trading.

However, this prosperity peaked after the launch of the TRUMP memecoin and then plummeted. The TRUMP token is a memecoin officially endorsed by former President Trump, and its issuance triggered a brief global attention and trading frenzy, but also marked a turning point in the memecoin craze. After TRUMP, market interest in new memecoins quickly waned, and many speculators exited due to losses, leading to a collapse in trading activity and fee revenue on the Solana blockchain.

According to data from The Block, the fee share of Solana has plummeted from over 50% at the beginning of the year to currently 9%, a drop of 82%. This collapse-like decline is extremely rare in the history of blockchain, reflecting Solana's ecosystem's over-reliance on a single application scenario (memecoin trading). When this scenario loses its appeal, the economic activity of the entire network comes to a standstill.

What is more concerning is that Solana has not been able to return to that level of activity since then. Although there are still DeFi protocols, NFT markets, and other applications running on-chain, the fees generated by these applications are far lower than during the memecoin craze. The challenge facing Solana right now is how to build a more sustainable and diversified ecosystem after the speculative frenzy has subsided.

How Hyperliquid Jumped from 5% to 40% Dominance

The rise of Hyperliquid is one of the most striking stories in the cryptocurrency market this year. As an L1 blockchain focused on decentralized perpetual contract trading, Hyperliquid accounted for only about 5% of the total trading fees of major L1 platforms at the beginning of the year, but as of last week, it has surged to over 40%, an 8-fold increase.

The core success of Hyperliquid lies in capturing the enormous demand for derivatives trading. Compared to memecoin trading, derivatives trading has the following advantages:

Higher unit costs: The fees generated per unit of activity in derivatives trading are much higher than in spot trading. Opening a position on a $100,000 perpetual contract may incur fees of $10 to $50, while a memecoin trade of the same amount on Solana generates less than $1 in fees.

Sustained Demand: Derivatives trading does not rely on short-term speculative trends, but rather on the daily needs of professional traders and institutions. Regardless of market bull or bear phases, the demand for hedging and arbitrage persists.

Higher trading frequency: Derivatives traders often use high-frequency strategies, possibly executing dozens or even hundreds of trades in a single day, far exceeding the frequency of memecoin speculators.

The technical architecture of Hyperliquid is also the key to its success. The platform uses its own L1 Blockchain, optimized specifically for high-frequency derivatives trading, providing a trading experience close to that of centralized exchanges while maintaining the transparency and security of decentralization. Its order book model (rather than the AMM model) allows professional traders to perform complex limit orders and conditional orders, which is difficult for AMM protocols like Uniswap to achieve.

In addition, Hyperliquid's token economic model has also attracted a large number of users. The platform allocates most of its fee revenue to token stakers, creating strong economic incentives. As trading volume increases, fee revenue and token value form a positive cycle, further attracting users and liquidity.

However, the rapid rise of Hyperliquid also faces challenges. Its user growth rate is relatively slow, and the surge in fee share mainly comes from high fees per transaction, rather than explosive growth in the user base. If market volatility decreases, leading to a contraction in derivatives trading volume, Hyperliquid's fee revenue may quickly decline.

BNB Chain integrates with Binance ecosystem to capture 20% of the market

The rise of BNB Chain is another story. This chain has grown from about 5% of the fee share at the beginning of the year to over 20% currently, a fourfold increase. This growth is largely attributed to the deep integration with the Binance ecosystem.

The launch of Binance Alpha and Binance Wallet has brought tremendous traffic benefits to the BNB Chain. Binance Alpha is an early project discovery platform launched by Binance, focusing on discovering and promoting potential projects, many of which are deployed on the BNB Chain. Binance Wallet is Binance's non-custodial wallet solution, deeply integrated with the BNB Chain, providing users with a seamless on-chain trading experience.

The gateway integrated with the world's largest centralized cryptocurrency exchange directs a large amount of retail traffic and activity to the BNB Chain. This traffic advantage is difficult for other L1s to replicate. Binance has over 200 million registered users, and even if only 1% of users use the BNB Chain, it still represents millions of users.

BNB Chain recently launched Aster, a new protocol focused on derivatives trading. Although Aster's user growth is slow, the high unit fees of derivatives trading mean that even a small number of users can generate significant fee revenue. This model is similar to Hyperliquid, indicating that derivatives are becoming a new battleground for L1 fee competition.

However, BNB Chain also faces questions about decentralization. Due to its close relationship with Binance, the level of centralization of this chain is higher than that of Ethereum or Solana, which may become a risk factor as regulatory environments tighten. In addition, the over-reliance on the Binance ecosystem also means that if Binance's market position is challenged, BNB Chain may be adversely affected.

The Future Paths and Market Prospects of Solana

In the coming months, Solana may need to adopt one of the following strategies to reverse the downturn:

Path One: Native dApp Hit

Solana needs a native dApp to achieve significant adoption and attention quickly, thereby bringing traffic back to the network. This could be an innovative DeFi protocol, a social application, or a gaming platform. However, developing a hit application is extremely difficult and requires a perfect combination of product innovation, market timing, and luck.

Path Two: New Speculative Cycle

Another option is to wait for another Solana-centered speculative cycle, similar to the memecoin frenzy at the end of 2024/beginning of 2025. Such cyclical booms are not uncommon in the cryptocurrency market, but the speculative business model lacks sustainability.

The failure of any option may mean that Hyperliquid and BNB Chain will continue to take a significant amount of fees generated by the major L1 from Solana, especially in a situation where the volatility of the cryptocurrency market is rising and derivative trading volumes remain high. The structural demand for derivative trading and higher unit costs make it a more stable and predictable source of income compared to memecoins.

From a broader market perspective, this change in L1 fee structure reflects the maturation of the cryptocurrency market. The early speculative frenzy is giving way to more professional and institutional trading activities. The rise of Hyperliquid and BNB Chain signifies that derivatives trading has become a major driving force in blockchain economic activity, a trend that may continue to deepen in the coming years.