Since April 2024, crypto projects have launched over 1 million coins on Ethereum (370,000) and Solana (640,000), with a majority being meme tokens. But what drives the popularity of these assets, and why do their creators favour the Solana blockchain?
We’ll explore these questions in this article, so let’s get started!
Coin or Token?
Meme tokens and meme coins are digital assets inspired by Internet memes, pop culture, and online trends. They are often developed as jokes or satire, focusing on community engagement rather than technical innovation. Investors frequently confuse meme coins with meme tokens, though there is a key distinction: meme coins, like Dogecoin, are issued on their blockchain, while meme tokens are created on existing networks such as Ethereum and Solana.
Dogecoin, the first and foremost meme coin, originated as a fork of Luckycoin, which itself is a fork of Litecoin. The Dogecoin network was launched in December 2013, predating the Ethereum mainnet by 18 months. The advent of blockchains with innovative contract capabilities has led to the proliferation of meme tokens. These tokens are now issued on platforms like Solana, The Open Network (TON), other Layer 1 networks, and Layer 2 solutions for Ethereum, such as Arbitrum and Base. The popularity of these assets can be attributed to three main factors:
- The readiness of blockchain infrastructure
- A rebellion against traditional finance (TradFi) and “serious” cryptocurrency projects
- A lack of new trends in the market
In the following sections, we will explore these factors in more detail.
Faster, Easier, Cheaper
Launching meme tokens has become significantly more straightforward and cost-effective than in 2013. It uses the Meme Coin Creator tool on Solana, creating a meme token that costs around 12–15 SOL (approximately $2000–2500 at the time of writing). This is a relatively small amount, considering that the total capitalisation of meme tokens on this blockchain reached $9 billion in May. Notable meme tokens on Solana include Dogwifhat, Bonk, BOOK OF MEME, Popcat, Cat in a Dogs World, and Myro. Solana offers a supportive environment for meme tokens due to several key features:
- Fast Transactions: The network can handle over 50,000 TPS, providing a decentralised exchange trading experience comparable to centralised exchanges (CEX).
- Low Fees: With transaction costs less than $0.01, it is easier for newcomers to participate, boosting trading volumes and excitement around meme tokens. For instance, Jeo Boden (BODEN), listed solely on the DEX Raydium on March 9, reached a $200 million capitalisation in just two weeks.
- Active Community: A large social media audience around Solana enhances the virality of its assets.
Before Solana, Ethereum dominated the meme token segment, launching tokens like Pepe, FLOKI, Memecoin, and Shiba Inu (SHIB). Shiba Inu, ranking 11th in market capitalisation on CoinMarketCap, gained massive popularity after Ethereum co-founder Vitalik Buterin donated 50 trillion SHIB to charity and later burned 410 trillion SHIB, valued at over $6.5 billion. The Ethereum ecosystem still holds several advantages:
- Large Community: According to the Developer Report, Ethereum has the most active developers of all blockchain ecosystems.
- Reliable Operation: Ethereum has consistently processed blocks since 2015, whereas Solana has experienced occasional outages.
- Developed DeFi Infrastructure: According to DeFi Llama, Ethereum ranks first in the DeFi segment with over $50 billion in locked funds, including contributions from Arbitrum, Blast, Base, and other Layer 2 solutions.
Revolt Against the (Crypto) System
One of the key drivers behind the surge in GameStop (GME) meme stocks was the “war” waged by retail traders against Wall Street, where users bought up assets to prevent major players from sinking the company. CoinEx representatives suggest that meme tokens can similarly be viewed as a form of protest against traditional finance (TradFi): “But if Bitcoin is a protest against the traditional banking system, then meme tokens are a rebellion within a rebellion”.
“New projects seek venture investors, and Bitcoin ETFs draw billions from institutions. The industry is receiving approval from TradFi, which somewhat clashes with the cypherpunk ethos. Meme tokens protest against these trends,” explains the CoinEx team. “Meme token teams often cite this stance as a justification for the lack of technological innovation and equitable distribution of coins. Bitcoin’s protest against TradFi aims to establish an alternative financial system. Meme tokens do not offer new solutions. Their creators are skilled marketers, not developers and economists,” comment CoinEx representatives.
Conclusion
Since Dogecoin’s inception in 2013, meme tokens have become a staple in the cryptocurrency market. These projects are deeply connected with Internet culture and have garnered a substantial following across various web segments. By 2024, launching a meme coin on platforms like Solana or Ethereum has become relatively simple, requiring little technical expertise. However, creating long-term value for these projects remains a significant challenge.
About Concorpad
Concorpad stands at the forefront as an innovative launchpad platform operating on the robust Concordium blockchain, poised to revolutionise the IDO landscape for inventive ventures. Our core mission is firmly rooted in bridging the divide between visionary concepts and the market, providing an all-encompassing framework from initiating token launch to its seamless listing. At Concorpad, our unwavering dedication revolves around cultivating growth and propelling innovation within the expansive realm of the blockchain ecosystem.
