Data & Insights: Solana's Memecoin Vacuum; Flathereum

From the Ashes of Uptober

• We started “Uptober” with elevated expectations rooted in historical performance patterns. Bitcoin had delivered positive returns in all but two Octobers since 2013, fueling anticipation for another green month. 
  • However, over the last month, total crypto market capitalization fell from $4 trillion at the start of October to $3.5 trillion by month's end, representing a 12.5% decline that has continued into early November.
• The drawdown intensified on October 10th, when perpetual futures markets experienced significant stress across major exchanges. Exchanges recorded 1.4 million liquidated positions totaling nearly $20 billion in forced selling. This cascade created downward pressure that compounded throughout the remainder of the month.
• The timing coincided with earnings season for major technology companies, including several Mag7 firms alongside crypto-focused platforms like Coinbase and Robinhood, which have had a high correlation with token prices. 
  • Despite results generally meeting or exceeding expectations, crypto markets failed to respond positively. This suggests prices had already incorporated optimistic scenarios, leaving little room for appreciation when anticipated catalysts materialized.
• The disconnect between seasonal expectations and actual performance highlights how widely anticipated bullish periods can create challenges. When market participants collectively position for specific outcomes, whether based on historical patterns or expected catalysts, the setup can become overcrowded.

How Private Can You Be?

• ZCash's shielded pool has reached 23% of total supply, up from 18% in October, marking a steady progression in network privacy adoption. The shielded pool functions by obscuring transaction details, making the entire network more difficult to trace as more ZEC enters this private state. 
  • As covered in previous issues, shielding requires direct interaction with the chain, making it a useful indicator of genuine network usage rather than pure speculative positioning.
• The growth in shielded supply offers an interesting parallel to Ethereum's staking dynamics. Approximately 30% of ETH is currently staked to secure the network, and it will be worth monitoring whether ZEC experiences similar behavior or resistance as it approaches this threshold. 
  • Both metrics reflect active participation in network operations rather than passive holding.
• The increase in shielding coincides with significant price appreciation as ZEC surged from approximately $400 on November 1st to as high as $750 last Friday, accompanied by substantial trading volume across exchanges. 
  • At the time of writing, ZEC ranks second among Coinbase's most traded assets by 24-hour volume, surpassing Ethereum with $345 million and $288 million, respectively. 
• The alignment between price performance and fundamental network activity represents a positive development. Rising shielded supply during a price rally suggests that increased attention is translating into actual protocol usage, not just speculative trading. This contrasts with many other tokens, where traders have largely taken positions through derivatives rather than buying spot.

Solana’s Memecoin Vacuum

• The number of active addresses on Solana has declined to 3.3 million, marking a 12-month low and representing a significant retreat from the network's peak of over 9 million active addresses in January 2025. 
  • Active addresses, measured as unique addresses that signed transactions, surged throughout late 2024 as Solana established itself as the dominant chain for memecoin launches and trading, offering faster speeds and lower costs compared to Ethereum.
• The decline has been gradual throughout 2025 as memecoin enthusiasm waned from its peak levels. However, pump.fun continues to demonstrate staying power within this sector, generating over $1 million daily and commanding approximately 90% market share among token launchpads. 
  • This suggests that while overall participation has decreased, concentrated activity persists in specific segments.
• The trajectory illustrates how quickly trends can shift in crypto markets and underscores the importance of ecosystem diversification. Networks that anchor their growth to a single narrative or use case face vulnerability when that narrative loses momentum. 
  • Solana's experience with memecoin-driven growth mirrors patterns seen across other chains where temporary catalysts drove user surges followed by eventual normalization.
• Despite declining active addresses, Solana continues expanding its product infrastructure. The network is building out new decentralized exchanges, prediction markets, and real-world asset protocols, while DeFi total value locked stands at $10 billion, led by protocols including Jupiter, Kamino, and Jito. The development activity suggests efforts to establish more durable foundations beyond speculative trading.
  • We’re watching to see which Solana app will eventually overtake memecoins as the leading vertical on the chain.

Flathereum

• At one point on Tuesday, November 4, 2025, ETH managed to briefly wipe out its entire year-to-date gains.
  • It had undercut the 10/10 liquidation wick before closing the day marginally negative for the year, though it has since recovered slightly.
    At the time of writing, ETH's YTD performance is up by roughly 7%.
• The reasons for the recent ETH weakness can be boiled down to two main factors.
  • The first was a sharp pullback in equities, as several large-cap stocks and indices such as the S&P500 and NASDAQ experienced notable sell-offs last week, in which their effects likely bled into crypto as the beta asset class.
  • The second probable cause is the ETH digital-asset-treasuries (DATs) reflexivity risk, where several ETH DAT equities flirted with or fell below 1x mNAV (market cap vs. marked NAV).
  • Sub-1x levels can limit issuance programs, which might explain the ETH price weakness and lack of structural demand.
  • In some cases, it forces balance-sheet de-risking or hedging to defend NAV, creating mechanical sell pressure into an already thin liquidity landscape post-10/10 cascade.
  • This matters because DAT equities have become a leading indicator for ETH liquidity, so when they trade below mNAV, the market loses a structural buyer and can also gain a mechanical seller at the same time.
• For added context, the cumulative market cap of ETH treasury companies fell from $21.4 billion on 6 October to just $12.87 billion a month later, representing a near 40% decline.
  • Meanwhile, in that same period, the price of ETH had fallen by just 29% in comparison.
  • This could signal that the equity sleeve moved first and harder, before then transmitting stress back into spot ETH via reduced or forced flows.
  • It will be worth keeping an eye on DAT mNAV health, issuance activity and any disclosures about hedging or forced sales.

Unfortunate Balancing Act

• The total amount of funds stolen by DeFi attackers increased from roughly $5.6 billion to over $5.7 billion last week due to an exploit to Balancer.
  • Balancer is a long-running DeFi automated market maker and DEX, built around a vault architecture that holds pool assets centrally while pool logic lives in separate contracts.
  • The protocol was exploited for roughly $116 million, primarily from its v2 stable pools and composable stable v5 pools
• The exploit occurred due to a rounding bug in its stable pools, which prompted the attacker to use batch swaps and flash loans to drain liquidity out of said pools.
  • The bug lived at the intersection of numerical precision (rounding) and multi-step transaction bundling, making it a hard class of failure to catch in static audits, especially when a single Vault mediates accounting for many pools.
  • Balancer has since paused the affected pools and halted creation of vulnerable pools while fixes and audits proceed, while its v3 pools remain untouched.
  • Two days following the incident, total value locked in Balancer declined by ~$475 million as the metric fell from $775 million to just ~$300 million.
  • Meanwhile, several forks and integrators have reported knock-on effects, most notably Berachain temporarily halting and hard-forking to contain exposure.
  • The attacker has since consolidated the assets across wallets and chains, with the funds still in their hands despite a 20% white-hat bounty offered in an ultimatum to return the funds.