Open-source blockchain platform, Solana’s native cryptocurrency, SOL, neared the $100 mark on Friday morning, extending a powerful rally into its third consecutive week.
Meme coin rally driven by dog-themed token
A meme coin is a cryptocurrency that gains popularity and value more from viral online hype, jokes, and speculation rather than having any real-world utility. The most famous example is Dogecoin (DOGE), which features the popular Shiba Inu “Doge” internet meme as its mascot and was created in 2013 as a joke mocking the flood of altcoins entering the crypto market.
The catalyst to the current rally appears to be a viral dog-themed token called BONK, which posted parabolic gains of over 1000% in late November. This captured the attention of retail crypto traders and inspired a wave of animal-inspired “bonk” meme coins rushing to replicate BONK’s success.
The biggest breakout hit has been dogwifhat (WIF), which rewarded early buyers with returns of more than 10,000% within days.
In the past month, thousands of these speculative meme coins have launched on the Solana blockchain, the preferred platform due to its cheap, fast transaction throughput. Most projects fizzle out quickly after a short-term pump and dump, but the hype has directed a spotlight back on Solana’s capabilities and revived broad-based retail interest in holding SOL.
On-chain activity on Solana has exploded as a result. Trading volumes and network fees over the past week have surpassed Ethereum for the first time. Impressive for a blockchain that is still less than two years old. Total value locked in Solana’s booming decentralized finance ecosystem has similarly catapulted from $400 million as recently as November to $1.3 billion today.
Solana price soars
SOL’s price gains this year now stand at over 800%, with an enormous surge occurring within the past two months alone. And that’s despite massive SOL selling pressure from the ongoing bankruptcy process of crypto exchange FTX, formerly one of the largest holders of the token.
With developers and investors alike flocking to Solana once more, the blockchain’s thriving ecosystem and status as an outlet for speculative mania should drive SOL rapidly toward the vaunted $100 mark in short order. The million-dollar question will be whether the network can sustain this breakneck growth beyond the meme coin hysteria.
“Solana is recovering more steadily than most major competitors and shows more interest in it in the community, which promises to keep its performance above the market in the coming months,” Alex Kuptsikevich, FxPro senior market analyst told Coindesk on Friday.
He added: “Google searches on Solana have soared 250% in the past two months. User interest has coincided with the explosive growth of the asset and rising prices of related meme coins.”
Featured image: AI-generated depiction of meme coins from DALL-E