As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen trends come and go. However, the recent surge in Solana’s (SOL) native token has caught my attention due to its unique driver – memecoins.
During the period between October 11th and October 18th, Solana’s native token, SOL, experienced a 12.1% increase in value. It appears that this surge was partly fueled by growing interest in meme coins. This heightened demand leads to an uptick in network activity, transaction fees, and the total amount of value locked within the network (TVL).
Currently, traders are discussing if the popularity of meme coins will last and what impact increased network activity could have on Solana’s (SOL) price.
It seems that memecoins are experiencing a significant increase in popularity without any underlying reason, but it’s evident that powerful social media influencers guide traders’ focus towards these tokens. For instance, consider the Oct. 12 post by pwnlord69.
In just a week, the memecoin known as Goatseus Maximus (GOAT) saw its market value soar to an impressive $400 million. This rapid growth was driven by whispers about the development of an artificial intelligence bot. However, upon closer inspection, it was found that this AI bot merely served to publicize the GOAT token. The token itself was introduced through Pump.fun, a decentralized tool that handles technical details and liquidity provision for Solana tokens on the Raydium exchange.
In October, various meme tokens on the Solana platform experienced substantial price surges. For instance, SPX6900 (SPX) soared by 379%, Apu Apustaja (APU) climbed 170%, and FWOG registered a 134% increase. Moreover, PUPS and MAGA (TRUMP) also saw significant growth of over 90%, as per Cryptorank.io statistics. As these meme coins gain worth, they draw more interest from social platforms and the media, fostering a self-reinforcing cycle.
Solana network activity supports a higher SOL price
But what matters most is if this trend influences Solana’s (SOL) pricing substantially, and how it fares against rival networks in terms of performance. For a comprehensive evaluation, the total value locked (TVL) is an essential factor to consider. This metric signifies the overall amount deposited in SOL’s smart contracts.
Solana’s total deposits recently surged to a two-year high, nearing 41 million SOL, up 13% month-over-month. In comparison, Ethereum’s TVL remained flat at 17.7 million ETH (ETH), while BNB Chain’s TVL also stagnated at 7.9 million BNB (BNB). Highlights on Solana’s network include Raydium, which saw a 70% increase in deposits over the past 30 days, and Sanctum, which gained 32% in TVL.
Assessing deposits is crucial, but to fully understand the demand for SOL, it’s essential to examine on-chain actions. For instance, a decentralized exchange (DEX) might show high volumes without necessarily having a substantial total value locked (TVL). In this scenario, Solana’s active network usage in recent times has solidified its lead, outpacing Ethereum during the past week.
As an analyst, I find it noteworthy that Solana’s DeFi exchange volumes have surged by an impressive 43% over the past week, outperforming its immediate peers in the market. Interestingly, Ethereum‘s layer-2 solutions, which offer reduced transaction costs, were unable to keep pace with Solana’s growth. For example, Arbitrum, one such solution, recorded a weekly volume of $3.74 billion, falling significantly short of Solana’s impressive $11.16 billion figure, representing a gap of approximately 64%.
Despite uncertainty about whether the memecoin trend will continue, the evidence points towards Solana potentially reaching $180, considering its advantage from a larger validator capacity. In essence, Solana seems to be strategically placed to seize growth opportunities in sectors like artificial intelligence infrastructure, Web3 applications, gaming, prediction markets, and beyond.
This piece is provided mainly for informational purposes, not as a substitute for professional legal or financial advice. The perspectives, ideas, and opinions shared here belong solely to the writer and may not align with those held by CryptoMoon.
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2024-10-18 23:50