Meme Frenzy: Half a Million New Tokens Emerge on Solana Network

In May, the Solana blockchain witnessed the creation of 455,000 new coins, reaching a monthly peak due to low entry barriers and the hype surrounding meme tokens. This is according to data from The Block. 

For comparison, during the same period, the L2 network Base saw the issuance of 177,000 coins, while BNB Chain had 39,000. Approximately 20,000 tokens were created on the Ethereum mainnet, as well as on the Arbitrum and Optimism layer two solutions.

“Solana is designed as a general-purpose layer one with fast finality, high throughput, and extremely low transaction fees,” noted Austin Federa, Head of Strategy at the Solana Foundation.

In his view, the network’s widespread adoption is due to these characteristics, making “the cost of experimenting and implementing new ideas almost negligible.” He believes that tokens on Solana “should be created as easily as content on the internet.”

The majority of new coins on the blockchain are meme tokens. According to CoinGecko, the market capitalization of this segment is $9.4 billion. 

The largest assets are dogwifhat (WIF) and Bonk (BONK), with figures of $3.2 billion and $2.1 billion respectively. 

Stephen Cheng, Director of Research at The Block Pro, partially attributed the trend to the popularity of the meme token launch platform pump.fun: 

“The meme coin mania plus the success of pump.fun have made Solana the leading blockchain for launching new assets. It remains to be seen whether the network can attract attention for token launches beyond memes.”

June 4, 2024 | 14:35Update:

According to The Block Data, since its launch in March, pump.fun has generated $31.8 million in revenue. On May 30, the daily figure reached a peak of $1.48 million.

Launch Rivalry 

The main competitor in terms of the number of coins created is Base. In April, the Ethereum solution surpassed Solana (240,000 versus 229,000), although it fell behind in May. 

Since the Dencun update, which reduced fees in L2, the Base protocol has sharply increased its number of users, transactions, and locked funds. However, researchers found that most of the activity involves meme coins, with one in six tokens being fraudulent.

In 2021-2022, BNB Chain led in issuance, with an average of 95,000 tokens per month. However, this number has gradually declined over time.

In total, since 2017, 7 million coins have been launched across the six largest blockchains. BNB Chain remains the leader with 3.7 million tokens, followed by Solana with 1.4 million, and then the Ethereum mainnet with less than 1 million.

Previously, Ryan MacMillan, Chief Investment Officer at Merkle Tree Capital, predicted that Solana would rise to $400 by November 2024. He believes the catalyst will be a wave of meme coins dedicated to the US election campaign.

Analysts at CoinGecko recognized Solana as the fastest network among major protocols. On April 6, the average daily number of transactions per second reached a record 1,504 amid the meme token boom.