The cryptocurrency of Solana, an open-source blockchain platform, called SOL, nearly reached the $100 milestone on Friday morning, marking a strong rally lasting for the third consecutive week.
The surge in price has occurred alongside a surge in activity and usage on the Solana platform, driven by a frenzy of meme coin trading.
Meme coin rally led by dog-themed tokens
Meme coins are cryptocurrencies that gain value mostly from online hype, jokes, and speculation rather than genuine utility. One well-known example is Dogecoin (DOGE), which features the popular Shiba Inu “Doge” internet meme as its mascot and was initially created as a parody of the new altcoins emerging in the crypto market.
The current rally seems to have been sparked by a viral dog-themed token named BONK, which experienced a significant rise of over 1000% in late November. This caught the attention of retail crypto traders and inspired a wave of animal-themed “bonk” meme coins seeking to replicate BONK’s success.
One particularly successful token was dogwifhat (WIF), which provided early buyers with returns exceeding 10,000% within days.
Over the past month, numerous speculative meme coins have been launched on the Solana blockchain. This platform is preferred due to its fast and inexpensive transaction processing. While most projects quickly lose momentum after a short-term surge, the hype has refocused attention on Solana’s capabilities and rejuvenated broad interest in holding SOL among retail investors.
This surge in activity has resulted in a significant increase in on-chain activity on Solana. Trading volumes and network fees have surpassed those of Ethereum for the first time in the past week, which is impressive considering that Solana is less than two years old. The total value locked in Solana’s decentralized finance ecosystem has also surged from $400 million just a month ago to $1.3 billion today.
Solana price surges
The price of SOL has increased by over 800% this year, with a substantial surge occurring in the past two months alone. This growth has occurred despite substantial selling pressure from the ongoing bankruptcy process of FTX, a former major holder of the token.
With developers and investors returning to Solana, the flourishing ecosystem and its status as a hub for speculative trends are expected to drive SOL rapidly towards the coveted $100 mark. The question remains whether the network can sustain this rapid growth beyond the meme coin excitement.
“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
