Solana is now the top smart-contract blockchain by trading volume, surpassing Ethereum, according to data from DeFiLlama.
The volume of tokens trading on Solana-based decentralized exchanges, aka DEXs, climbed by 67% to $21.3 billion over seven days, whereas volume on Ethereum-based equivalent exchanges rose by just 3% to $19.4 billion. Likewise, the number of daily active addresses on Solana has also spiked, rising from 400,000 to 600,000 in January to February to roughly 1.25 million on Tuesday.
“A lot of the surge we’ve seen in Solana DEX trading volumes will likely come from the memecoin wave that we’ve seen over the past few weeks,” Martin Lee, a data analyst at Nansen, told Fortune.
Speculative buzz around Solana-based memecoins dogwifwhat (WIF), bonk (BONK), book of meme (BOME), MAGA (TRUMP), and slerf (SLERF) is partially behind Solana’s recent successes. On March 13, 2,300 Solana memecoins were minted in one hour, meanwhile stablecoins on Solana reached a multiyear high of $2.80 billion.
In the last 1 hour, 2,500 Solana memecoins were created.
— Ram Ahluwalia CFA, Lumida (@ramahluwalia) March 13, 2024
The speculative frenzy behind Solana’s memecoins has been catalyzed by a trend called “presales” whereby tokens are sold before officially launching. A buyer sends funds to a crypto address and receives the set number of tokens at a later date. Some estimate that over $100 million worth of tokens were sent to various memecoin presales over the weekend, mainly on the Solana blockchain, CoinDesk reported.
“There’s a bastion of memecoins attracting users with the lure of outsized returns: Speculation on these are likely currently driving an influx of users, but I’m hopeful that new entrants will stick around,” Philip Forte, founder and CEO of Elixir, told Fortune.
The hype of presales has grown with the success of BOME. Last week, its creator took to X to offer a presale, and the result was that early investors turned a few hundred dollars into hundreds of thousands over a few days. Meanwhile, BOME’s market capitalization soared from zero to $1.6 billion in a few days, with over $100 million in daily trading volume, CoinDesk reported.
This BOME presale meta is the worst thing to happen in this space in a while https://t.co/06cOaB48W7
— Franz (@Franz_0x) March 17, 2024
But the presale frenzy has drawn criticism from some on-chain watchers, with one X user posting: “2 years later and everyone is right back to bidding ponzis. People can do what they want with their money but sending money to a ‘memecoin presale’ that has a 99.9% chance of rugging is actually just dumb as hell.” (BOME prices did drop after its launch, about 50% at the week’s start—steeper than a wider market correction.)
“The reason Solana is able to capture all the memecoin volume as opposed to ETH L2s is because Solana’s transactions fees have been historically much lower,” Pat Doyle, Blockchain Researcher at Amberdata, told Fortune. “This makes investing in the speculative memecoins much more attractive as you don’t have a larger percentage of your transfer consumed by fees.”
Doyle added: “Looking at this from a broader view, the memecoin craze is showing the ability for Solana to handle high volume and throughput.”
And, to be fair, many investors had an eye on Solana before the latest memecoin boom: The blockchain’s native token SOL—though down about 8% today, to $168—is up almost 70% in 2024.
Austin Federa, head of strategy at Solana Foundation, told Fortune in a statement that although the company expects some of the new users associated with the memecoin blitz to exit, "We see this as a catalyst for a wave of new users to discover the usability and power of the Solana network—and stay for the long term."
