Solana Blockchain: Meme Coins Influence Q2 2024

Solana experienced a substantial surge in Q3 2023 and Q1 2024, making it the fastest-growing L1 blockchain in terms of new addresses, DEX trading volume, TVL, and revenue. 

In this article we will look into several meme coins via a case study of how they attributed to the growth of the popular Solana blockchain.

You can read more about Solana’s rise as seen by its key on-chain metrics here.

What Is a Meme Coin

This research deals with several meme coins, each of which has its own unique features and symbolism.

Some of the meme coins started out as a kind of a joke or symbols of pop culture but have become ones of the most famous cryptocurrencies.

Their symbolism give the project a unique and friendly character. Meme coins have quickly gained popularity thanks to its community, and massive support.  

The allure of meme coins is backed by celebrities like Elon Musk endorsing these digital assets. Public perception and social media influence can be seen here as a fundamental value in the crypto world.

Meme coins are attractive to various investors and fans of viral content.

Although, investors should keep in mind that these very niche cryptocurrencies are subject to drastic price fluctuations.

Meme Coins: Impact on Recent Solana Surge

Below we explore how different meme coins contributed to Solana’s success: Bonk (BONK), Dogwifhat (WIF), and Book of Meme (BOME).

Bonk (BONK)

Bonk is one of the first meme coins launched on Solana in 2022 and since then it attracted significant attention from the community due to its impressive price growth and airdrops for loyal community members. 

After a period of decline and stagnation Bonk price started to grow in October 2023. In November, BONK showed a +403% growth. Next month, the BONK price surged by 246%. On December 15, BONK price rose by 84%. Bonk price growth coincided with increasing on-chain activity on Solana.

Sources: Artemis, CryptoRank

On December 15, 2023 the number of active addresses rose to 1.1M while daily transactions amounted to 25.7M, the highest result since June. Following BONK price growth, trading volume on Solana-based decentralized exchanges rose to record $1.5B. 

Sources: Artemis, CryptoRank

Such numbers demonstrate the impact of one meme coin on the whole blockchain’s performance as users started to actively use Solana to trade BONK and exchange it between wallets. 

Bonk's all-time high price was reached on March 5, 2024. DEX trading volume this day was $2.9B - one of the record results for Solana.

Dogwifhat (WIF)

Dogwifhat is another “blue chip” meme coin on Solana currently ranking first by market cap among Solana meme coins. 

WIF was launched in November 2023 and quickly gained popularity among the community. WIF price surged by 4000% on December 23. Trading volume of WIF (buy volume + sell volume) was $88M, 7.3% of the total DEX trading volume this day. 

On the previous day, DEX trading volumes reached a new high - $2.6B. On December 24 SOL price broke $100 - the level not seen since April 2022. WIF price performance in 2024 ws also impressive with 449% gain in March. 

If we compare WIF and SOL price performance we will see that WIF highs coincides with SOL highs. For example, WIF ATH coincides with SOL reaching $203 - the level not seen since December 2021.

WIF and SOL Price Performance

Source: CryptoRank

Book of Meme (BOME)

BOME is another successful meme project on Solana with a market cap of $724M at the time of writing. 

BOME was introduced on March 10 and caught the attention of users during its presale. On March 14 BOME was listed on DEXes and reached its all time high on March 16 demonstrating a 310% growth within 24H. BOME launch significantly impacted on-chain activity on Solana. 

BOME Price Chart, March 2024

Source: Artemis, CryptoRank

During March 14-17 daily active addresses on Solana doubled from 1.2M to 2.4M (100% increase) while DEX trading volume increased to record $3.8B on March 15. 

In addition to active addresses and DEX trading volumes spike, Solana faced an increase of network fees that surged to $4.9M on March 18, a 206% 7D growth ($1.6M on March 11). 

Solana Active Addresses, March 2024

Source: Artemis, CryptoRank

BOME launch and impressive price performance together with other memecoins contributed to the overall growth of Solana on-chain activity, trading volumes, and revenue.

Meme Coins: Impact on DEX Performance

DEXes are an important part of blockchain’s development and the backbone of its DeFi ecosystem that ensures the transfer of value in the blockchain between users and protocols. 

High activity on DEX means the high interest from users to interact with a certain chain and its protocols, thus fostering its growth, on-chain activity, and liquidity inflows. 

In the Solana case, we see the increased DEX activity throughout Q1 2024 with user base and trading volumes growth. Traders on Solana-based DEXes raised from 456K to 2M during the Q1 2024, a 338% quarterly growth. 

Solana DEX Traders

Source: dune.com

By the end of the Q1 2024, meme coin trading made Solana the leading blockchain by DEX trading volume with $17B daily volume. It even surpassed Ethereum, the undisputed leader among L1 solutions by TVL and trading volumes that faced $16B DEX daily trading volume by the end of Q1 2024.

Source: dune.com

Meme coin trading played a significant role in Solana DEX rise. New and old memecoins contributed to a unique traders growth. 

Number of traders interacting with two largest memecoins in the Solana ecosystem, WIF and BONK, increased from 5.9K to 13.7K in Q1 2024, a 132% quarterly growth. 

Together with other meme coins/low cap projects, WIF and BONK accounted for 369K unique traders by the end of the quartal. This number represents a 43.4% share of all traders using Solana-based DEX by the end of Q1 2024 and it makes meme coin the most popular category for traders on Solana.

Source: dune.com

Meme coins have also significantly improved their trading volume share on Solana based DEXs during Q4 2023 - Q1 2024. 

In the beginning of the Q4 2023 all meme coins and other low cap projects accounted for nearly 10% of trading volume. By the end of the year WIF and BONK together represented a 2.4% of total DEX trading volume. 

Together with other memecoins they were responsible for almost ⅕ of trading volumes on Solana (18.5%). This trend continued in Q1 2024 when WIF and BONK share amounted to 3% while all meme coin market on Solana accounted for ⅓ of Solana DEX trading volumes (31%) with only SOL having a higher market share (44.3%). 

Source: dune.com

Users can get all the coins mentioned in this article on SimpleSwap.

Summary

Collectively, such meme coins as Bonk, Dogwifhat, and Book of Meme, have driven significant growth in Solana's ecosystem, underscoring their impact on the blockchain's overall performance.

Another important effect of meme coins is a significant growth of DEX activity and trading volume with the major part of traders engaging in meme coin trading.

DEXes play a crucial role in the development of blockchains and their DeFi ecosystems by facilitating value transferbetween users and protocols. 

Memecoins also became the second largest category for trading on Solana-based DEXes in Q1 2024. Leading memecoins launches and price surges triggered the growth of on-chain activity on Solana and even the price performance of SOL.

Meme coin trading was a major factor in the rise in DEX activity, making Solana the leading blockchain in DEX trading volume with $17 billion in daily volume, surpassing even Ethereum. 

The number of traders engaging with top memecoins WIF and BONK grew by 132%, contributing to 43.4% of all traders on Solana-based DEXes by the end of Q1 2024. 

Meme coins' share of trading volume on Solana DEXes highlights their significant impact on Solana's on-chain activity and overall growth.