The token behind Solana, a layer-1 blockchain that’s competitive with the Ethereum blockchain, has been through the wringer after it plummeted from a high of about $260 in late 2021 to a low around $8 in early 2023. But like every good movie with a character redemption arc, Solana has one too.
The cryptocurrency passed $160 on Wednesday, marking its highest price since January 2022. It’s the fourth largest cryptocurrency (excluding stablecoins) by market cap behind bitcoin, ether and BNB, in that order, and it’s up 44.8% on the month and about 676% from the year-ago date, according to CoinMarketCap data.
The blockchain behind the token is well known for its NFT marketplace, which is the second largest by all-time sales volume at $5.2 billion, as well as its decentralized finance (DeFi) ecosystem and more recently, developers’ ability to churn up memecoins on its chain faster than I can write this article. So it’s not surprising that the growth and traction on its blockchain is also being transpired through to its token.
Since mid-December, a number of Shiba Inu dog-themed tokens on the Solana blockchain like Bonk and dogwifhat have taken off. The two tokens, which try to capitalize on the popularity of the original dog-based memecoin, Dogecoin, are up 150% and 600% on the month, respectively. The dogwifhat community also self-funded about $700,000 in less than four days to get the token shown on the external surface of the new Las Vegas Sphere — and people paid through USDC, the second-largest stablecoin, not dollars, to do it.
And don’t worry, cat lovers: kitty-themed tokens like Popcat are also showing crazy gains. For context, Popcat’s price increased 3,205% on the month.
Bonk and Solana’s web3 smartphone Saga gained more attention after savvy crypto traders realized they could redeem 30 million tokens of BONK, worth between $500 and $800 in December, on the device. At current prices, the 30 million in free BONK tokens is worth almost a grand.
Buying frenzy for Solana Mobile’s second phone drives preorders sky-high
In recent weeks, a number of politically inspired memecoins on the chain also have gained traction, like jeo boden, doland tremp and the crudely- named elizabath whoren, with market capitalizations of $71.8 million, $47.8 million and $8.8 million, respectively, at the time of publication. (If you’re wondering if I misspelled those tokens based on U.S. politician’s names, I didn’t.)
Even Coinbase, the largest crypto exchange in America, shared steps on its website for how to buy some of these tokens in the U.S., through other avenues off its own platform. In order to trade some of these cryptocurrencies on Solana, users need the native chain’s token to pay a nominal fee, fractions of a penny. (Please note that none of this is financial advice, but one of the reasons that could point to Solana’s price increase.)
Memecoins in general have seen a huge rally as the crypto market continues to thaw from its most recent winter. This, alongside airdrops from projects’ tokens, have sparked interest in Phantom, a crypto wallet heavily used across the Solana ecosystem, which has seen its active user base more than triple in the past year to 3.2 million monthly active users.
While the majority of these tokens have no underlying utility — dogwifhat is literally named after a dog wearing a knitted hat — people are still rallying behind them, arguably in hopes of getting rich quick or because they resonate with the eccentric, tsunami-like communities these assets create.
But what goes up, often comes down, and the quick rise of some memecoins is often followed by extreme busts, sometimes within days of launching. While some may retain price support for months, as we’ve seen with a handful of tokens, it’s important to consider that not everything that shines like glitter is gold.
Comment