The rally in memecoins is powering a surge in Solana, the cryptocurrency that almost died amid the collapse of Sam Bankman-Fried’s FTX exchange.
Trading volume over Solana’s blockchain reached the highest in more than two years on March 15, with memecoins such as Slerf, Boom of Meme, Snap and Dogwifhat leading activity on decentralized exchanges, according to data compiled by CoinMarketCap and DEX Screener. Slerf alone accounted for nearly $2 billion in volume in the last 24 hours, according to DEX Screener, which said total volume on Solana over that time nearly touched $11 billion.
Solana’s low fees have made it a leading blockchain for launching fresh memecoins, and that’s brought more participants onto the network. Users usually just need to download a Solana wallet, such as Phantom, and use Solana’s SOL token for transactions. SOL’s price has almost doubled this year, topping $200 on Monday the first time since late 2021, and raising concern about the pace of the rally.
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“There’s no way to know how sustainable this memecoin activity is,” said Cosmo Jiang, a portfolio manager at Pantera Capital, an investor in Solana. “But because people have to deposit money on Solana to trade those memecoins, as these users discover other use cases they are more likely to stay around. A lot of this volume could become other activity on Solana.”Consumers may later wade into Solana nonfungible tokens and games, Jiang said.Pantera has been raising money from large investors to buy deeply discounted Solana tokens from the estate of bankrupt FTX, according to marketing materials from February sent to prospective investors and seen by Bloomberg. The FTX estate declined to comment last week, while Pantera didn’t respond to a request for comment on the fund raise at the time.
BloombergMuch of the trading activity on Solana has been happening on decentralized exchanges like Jupiter, Raydium and Orca.Launched in 2020, Solana is a rival to the Ethereum blockchain and supports a range of crypto-centric apps. The number of monthly active addresses on the network topped 20 million in each of the past three months after a stretch of suppressed activity dating back to FTX’s bankruptcy, according to The Block Research data.
Solana’s decentralized exchanges “have experienced a dramatic increase in volume over the past few weeks,” said Jacob Joseph, a research analyst at researcher CCData. “Moreover, Solana has witnessed a surge in retail activity, with user activity on the blockchain surpassing that of Ethereum. Specifically, over the past few days, leading Solana DEXs have, collectively, outperformed top Ethereum DEXs like Uniswap, partly due to the ongoing memecoin frenzy.”