Over the last seven days, Solana made a strong recovery following the Trump inauguration sell-off, briefly hitting a high of nearly $270 before suffering a dip after the markets went risk-off due to DeepSeek's disruptive launch. It was a week that also saw the start of the Chinese/Lunar New Year (Gōngxǐ fācái to all my readers!) and the latest Federal Open Market Committee (FOMC) meeting that will determine new interest rates a couple of hours after I send this off.

The AI Arms Race between the U.S. and China’s DeepSeek seems to have officially kicked off this week. China’s unknown startup DeepSeek has shocked the AI and crypto world, stoking fears that the current leading AI projects are drastically overvalued, causing U.S. tech stocks to fall (some have renamed it to DeepSh*t as a result!).

However, the fact that it could bootstrap $10 million in funding to build an AI tool to not just rival but also beat OpenAI and Google in many metrics is bullish for AI adoption in the long run, as it democratizes global access through lower costs and more attainable hardware. Of course, the scammers didn’t wait long and soon made a bunch of fake DeepSeek tokens to cash in on the hype, stealing $48 million from 22,000 Solana users. 

Beyond that, there were some new causes for 2025 bullishness. Solana's stablecoin supply hit a new peak after climbing past $11 billion, beating Ethereum in stablecoin growth.

Leading AI agent platform Virtuals Protocol is now also available on Solana (sorry Base!), joining ai16z and Zerebro.

After closing last year on a low note, Pump.fun is back in the spotlight for the right reasons. The Solana-based meme coin launchpad generated $15.5 million in fees on Jan. 24, setting a new daily record.

And that's not even half the story. Here is what happened in Solana this week.

SOL cooled down after last week's massive rally to a new all-time high. The slight dip caused by the DeepSeek AI launch did not help Solana's case, although SOL has erased most of the losses.

Its total value locked (TVL) has taken a knock from last week's historical high, while the number of active addresses remains the same.

The hangover of last week's market euphoria has hit Solana hard, with its DEX volume declining significantly. It's down 39%, now sitting at $70.5 billion.

As expected, Solana's DEXs were on the receiving end as they watched their trading volumes plunge. Even Raydium couldn't escape the crash, losing 23.5% of its trading volume. Others followed a similar pattern, though to varying extents. On the bright side, Pump.fun offered a rare sight, with 24.63% gains during the week.

This tough week saw the majority of the top 10 assets tanking. Bitcoin briefly fell below $100K during the week but has recovered to over $102,000. Ethereum is down nearly 4% over the week. The broader market experienced a wipeout of over $880 million in leveraged long positions due to the downturn. In all this chaos, XRP is up 1.06%. We’re not allowed to joke about XRP anymore, until Solana flips its market cap again, which is somehow over 50% higher.

Solana's TVL slipped from over $12 billion to $11.18 billion. However, the network generated $8.54 million in fees in 24 hours, higher than Ethereum, Tron, and Arbitrum combined.

The trading volume on Solana's ecosystem was nearly slashed in half, reminding investors of the market's volatility. The market cap declined by less than 3%.

Most Solana ecosystem tokens saw red over the last seven days but exchange tokens performed better than the ecosystem's tokens. Jupiter (JUP) gained nearly 40% riding the momentum and ambitious announcements at its Catstanbul conference, which includes new omnichain JupNet and the acquisition of a majority stake in meme coin launchpad Moonshot.

Solana's weekly TVL is up less than 1%, faring better than Ethereum’s 3% drop. Tron gained a bit of ground, but Hyperliquid suffered a major setback as its TVL fell nearly 30%.

Solana wants to capture 10% of the DeFi market as it strongly clutches the second position, and its ecosystem is doing its bit.

Ethereum remains on top with over half of the total TVL while other chains share the remaining balance.

• Ethereum maintains second place, but Base is not too far off with 17.8%.

Pump.fun hit a new milestone on Jan. 24, generating $15.38 million in fees, its highest single-day revenue to date. This surge was driven by the launch of Vine Coin, a new meme coin created by Vine co-founder Rus Yusupov.

Jupiter Acquires Majority Stake in Moonshot

Solana's third-largest DeFi protocol, Jupiter, has acquired a majority stake in Moonshot, an app that enables users to buy meme coins with Apple Pay. The terms of the deal have not been disclosed.

Virtuals Protocol Expands to Solana, Establishes Strategic SOL Reserve

50% of TRUMP and MELANIA Meme Coin Holders New to Solana Altcoins

Data from Chainalysis reveals that about half of those holding the TRUMP and MELANIA meme coins had never previously purchased a Solana altcoin, highlighting the tokens' ability to attract new users to the Solana ecosystem.

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