A few meme coins and tokens in the Solana ecosystem are increasing in value due to SOL’s 110% increase over the last month, which indicates that investors are becoming more optimistic about the blockchain.
According to data, Bonk (BONK), a Solana token that started as a meme coin in January, increased 66% on the last day to bring its week-long run to almost 170%. In a week, trading volumes and market capitalization have almost tripled.
Rise of Solana’s Cryptocurrency
After falling by 94% in 2022, Solana’s cryptocurrency, SOL, is supposedly making a resurgence and drawing interest from investors in digital assets.
According to a Bloomberg report published on Thursday, December 21, the price of the SOL token has increased by about 800% since December 2022.
One of the main causes of Solana’s comeback is the technological advancements made to its blockchain. Significant improvements have been made to the blockchain, resolving earlier network outages and performance problems. Solana has not had any network issues since February.
According to the study, Tensor, a new NFT marketplace on the Solana platform, has surfaced and is grabbing 57% of trade volume, compared to Magic Eden’s 37% in 24 hours. Tensor gives customers an NFT experience comparable to professional trading and lets them profit from swift price fluctuations.
Nevertheless, the research notes that risks and speculative components are associated with Solana’s return. The popularity of the Solana memecoin BONK is one important aspect. Originally intended to be a joke, BONK has garnered much attention and increased by almost 400% in the last month, reaching a market valuation of $1.2 billion.
Comeback of Solana:
Some experts have compared BONK more to gambling than investing due to its extremely speculative nature, attributed to its mysterious founders and uncertain intentions.
Solana’s comeback also reflects larger market attitudes. Due to the Federal Reserve’s recent shift in favor of lowering interest rates, traders are returning to riskier assets like cryptocurrencies. The cryptocurrency market, frequently seen as the riskiest asset class, can be greatly impacted by any shift in public perception of risky assets.
Dog-themed tokens like bonk (BONK) and dogfight (WIF) have been popular on the Solana network. Because Solana and Avalanche have far lower transaction costs and better processing speeds than Ethereum, traders are increasingly adopting these networks.
Quick Transactions of Solana
Compared to Ethereum, where transactions can cost up to $15 and take up to a minute to conduct, Solana transactions are inexpensive and quick, taking only a few seconds to complete. This change emphasizes how crucial cost-effectiveness and efficiency are becoming in the blockchain and cryptocurrency world.
Transactional activity on networks like Solana and Avalanche has increased significantly due to their low costs and higher speeds. Recent data indicates that both networks have experienced a more than twofold increase in transaction volumes over the last month, along with a rise in active wallets and new users.
In the current market situation, some trading organizations have not seen any indications of an impending market correction, which is usually characterized as a 10% to 20% decline. The double bottom formation on Bitcoin’s intraday charts indicates that the market is not pointing in the direction of a major correction.
This comeback suggests fresh capital is entering the Solana blockchain, particularly from traders willing to take risks. Value locked in Solana ecosystem projects jumped from $300 million at the beginning of October to $465 million on Thursday, indicating a rise in funding allotted to decentralized apps developed on the network.
Improved sentiment may have resulted from developers’ introduction of single-sided staking on bonk liquidity pools at the beginning of November.
In January, Bonk became the focal point of the Solana ecosystem as the Sam Bankman-Fried and FTX exchange scandal soured public opinion of the blockchain network.
During his active reign, Bankman-Fried was one of the leading advocates of the Solana ecosystem. He made millions of dollars’ worth of investments in the Solana ecosystem, its SOL tokens, and even the network’s decentralized exchange, Serum.
However, investors saw Bankman-Fried’s arrest as a significant obstacle to the network, which appeared to be the catalyst for a decline in Solana tokens and ecosystem enterprises.
As one of Solana’s original investors, FTX consistently got a sizeable amount of SOL that was unlocked by a predetermined vesting schedule. According to a court filing, as of September 2023, it possessed tokens valued at over $1.16 billion, which heightened concerns about selling pressure when the tokens became accessible.
However, the bankruptcy committee in charge of FTX has recently taken some encouraging steps. Midway through October, the committee bet more than 5.5 million SOL, or $122 million at the time, on the Solana network, allaying short–term concerns about a sell-off.