The Solana memecoin saga will end in tears. Just not today

Few indicators of a crypto bull run are as clear and certain as memecoin frenzy. While the digital asset market maintains its act as a rollercoaster of innovation and speculation, nothing quite captures the public’s imagination and investment dollars as a memecoin.

And in this rally, Solana sits firmly on the memecoin throne.

Bitcoin may have captured mainstream headlines with a new peak above $72,000 in March 2024. Yet secondary limelights belong to a slew of new cryptocurrencies inspired by internet memes and jokes, creating overnight millionaires and tempting tens of thousands of new speculators.

So what are all these new memecoins and what does the Solana network have to do with them? 

A brief history of memecoins

In the beginning, there was Dogecoin. A playful satire of Bitcoin, the granddaddy of memecoins was based on the doge internet meme of 2013. Its success in popularity and market value – as well as a remarkable revival in 2020 –  spawned a plethora of imitators, hoping to capture the same viral appeal.

To understand some of the reasons behind the virality of memecoins, read this Learn Crypto article: Why are memecoins so popular?

These memecoin pretenders generally didn’t even bother with creating a new type of blockchain or network. Ethereum’s smart contract platform allowed anyone to issue a new token fairly quickly and cheaply. So the majority of memecoins were simply issued as tokens based on Ethereum and, later, on other similar smart contract networks.

The rise of house Solana

In January 2023, Solana developers created the BONK memecoin and remains the case study for Solana’s sudden prominence in the digital markets. After an airdrop of half of its total supply, they embarked on an aggressive marketing campaign, creating hype in their communities.

BONK went on to generate gains of over 4,000% in days, but then went through a decline over the next few months, losing as much as 90% of its original value.

However, its success spawned dozens of pretenders to the BONK throne, and in early 2024, as Bitcoin primed for a rally with the Bitcoin halving on the horizon, Solana emerged as the choice destination for new memecoin projects. 

There are several reasons to explain why this happened on Solana, rather than on Ethereum or even Binance Chain, which arguably were more prominent and mature blockchain networks.

Speed and efficiency

A high-performance blockchain, Solana had already been attracting developers and investors with its fast transactions and low fees (a common theme among Ethereum rivals) since at least the previous crypto bull market in 2020.

For apps and crypto running on other networks, transactions were becoming more and more expensive as networks struggled to cope with their increasing loads. This meant sending, paying, or any other action like creating a new memecoin was getting progressively slower and more expensive. In short, this was crypto’s longstanding scalability issue.

Solana, however, seemed able to deal with speed while keeping costs low despite the growth of apps on its network.

Community and hype

Solana has a huge, supportive community that has taken a special shine to memecoins.

While hardly different from most other crypto communities, developers on Solana have somehow managed to create a collaborative environment to launch and promote these new tokens.

They’ve also coordinated PR campaigns and social media amplification very well, ensuring that as paid media goes out on all the major crypto channels, X, Telegram, and Discord are always buzzing with activity to continuously fuel the virality of Solana memecoins.

These factors have created a breeding ground for meme coin innovation on Solana. New projects are always emerging, keeping the meme coin craze alive within the Solana blockchain.

All of this has proved to be a fertile environment for memecoins, which could thrive without the scalability issues plaguing other networks. And Solana appears to be the hottest breeding ground for memecoin innovation, with new projects launching daily even into late March 2024.

The best Solana memecoins

There aren’t any “best” memecoins but there are popular ones. Among the hundreds of memecoins on Solana, here are some of the more prominent ones – expressed by market capitalisation, anyway, are:

Dogecoin on Solana

Dogecoin’s presence on Solana through wrapped tokens has brought increased attention to the network, showcasing its capabilities to support even the most popular memecoins.

Bonk Inu

An imagined child of BONK and Shiba Inu, Bonk Inu gained significant attention for its charitable contributions, a throwback to the days when Dogecoin supported many charities and a reminder of memecoin’s (occasional) positive impact beyond mere speculation.

Slothana

Slothana (SLOTH) is gaining traction due to its viral potential and innovative presale mechanism. After seeing huge community interest, the token raised nearly $550,000 just a few hours after launch.

Smog

Smog (SMOG) set aside 490 million tokens, a third of the total token supply, for a generous airdrop. The appeal is huge staking returns. SMOG creators went on to launch Slothana, fairly typical for memecoin projects, so you know there is little long-term interest from even developers.

Myro

Co-founder Raj Gokal’s dog was the supposed inspiration for MYRO, and it is one of the few memecoins with utility, albeit nominal. You can use MYRO to buy Myro plushies and a buy bot helps you accept Myro on sites, but no prizes for guessing how much volume those actually generated.

Can I get rich from memecoins?

Given that memecoins can quickly jump in value up to 1000% of their original launch price, it’s tempting to think that you could easily make money from memecoins.

However, you’d have to be extremely lucky with your timing. Getting in early, and exiting at the peak. Miss the peak and you’ll lose next to all of your investment.

Since there’s really very little involved in predicting the peak, it’s accurate to say you’re just gambling if looking to profit with memecoins.

What about meme sniping?

Sure, there’s a common tactic some speculators swear by. This involves grabbing as much newly-listed meme tokens as possible once they hit the market, and then selling them as soon as they become profitable, without waiting for a peak.

Raydium is a decentralised exchange (DEX) on Solana that is a popular place for meme sniping, since Solana memecoins launch and start listing on Raydium. The liquidity surge on Solana has also helped people do this on Raydium.

It is important to note, however, that there is a high failure rate for newly-listed memecoins. For every “successful” project, there are dozens of new memecoins that never peak, or simply “rug pull” – a common scam where developers simply run off with investor money soon after listing.

You might get lucky with one, but you’ll almost certainly lose money with many more – especially if you’ve missed the peak.

How risky are Solana memecoins?

Despite the excitement currently surrounding memecoins on Solana, one only needs to look at the history of memecoins to realise that it’s a high-risk venture with a high probability of losses.

From Shiba Inu to SafeMoon, some of the biggest memecoins to have ever graced crypto, many have experienced dramatic declines after their original hype faded. 

The major risk with a memecoin is with anonymous developers who hold no accountability and offer little transparency with memecoin projects. By being th sole controllers of invested funds, or through a lack of verifiable smart contract codes, developers can easily rug pull, that is, steal all the invested funds.

Even legitimate schemes are vulnerable to artificial inflation of prices by insiders who then selloff when the public jump in.

Fundamentally, memecoins’ lack of utility is what will prevent them from ever reaching the heights promised by developers. And if that’s not enough to discourage serious investors, memecoins have also been catching the eyes of regulators, who view them as frivolous investments.

Solana memecoins will likely last the entire year – riding on the wave of Bitcoin optimism that should carry on throughout 2024. But it is really difficult to see how they will escape the usual fate of memecoins.

When you play the game of Memecoins, you win or die. There is no middle ground

The fact is, all memecoins will crash. Not if but when.

Dogecoin is perhaps the only true outlier, being the granddaddy of the lot. But Dogecoin had an enthusiastic, long-term community and recognised utility – it’s still an accepted mode of payment on many sites, and a popular currency accepted on crypto gaming platforms.

The Solana memecoin saga is a testament to the power of internet culture and its ability to move markets. While exciting, though, it is likely to follow the pattern of its predecessors – ending in tears for those who don’t navigate the market with caution. Investors should be wary of the volatility and risks inherent in such speculative assets.

On the other hand, some people will feel that memecoins represent more than just speculative assets; they are a reflection of the digital zeitgeist, encapsulating the humor, irreverence, and communal spirit of the internet age.

If you’re looking to simply be a part of that, and to experience that cultural crypto phenomenon first hand, at least make sure you don’t dump a fortune into them.