Cryptocurrency investors are paying less and less attention to meme tokens in the Solana network. What is the reason for this trend?
In the seven months of its existence, the meme-token platform called pump.fun generated over $100 million in revenue. This result allowed it to become the fastest growing protocol in the Solana ecosystem and the digital asset industry as a whole. Recently, however, activity on this platform has noticeably dropped, which is also due to the collapse in the value of most meme tokens and the market as a whole. Well, what is happening can be explained.
Meme-tokens are the main trend in the current bullrun. Their peculiarity lies in their simplicity, ability to attract investors and generate trading volumes, due to which the rates of such assets are able to change by tens or even hundreds of per cent per day. However, this usually does not last long, and the collapses of memes are no less tangible.
As of today, the market capitalisation of meme tokens is $40.3 billion, and trading volumes exceed the level of $4.3 billion.
Market capitalisation of meme-tokens and trading volumes with them
The pump.fun platform in the Solana network has made its contribution to popularising the trend. It allows you to quickly create any token and, in addition, purchase it in the first minutes of its existence, thus getting an opportunity to earn big.
If the project attracts the attention of the crowd, it gets listed on decentralised exchanges, which also affects the value of the asset.
However, as statistics shows, it is literally harder to make money on something like this than in a casino. Accordingly, most investments in new memes end in investor losses.
What’s happening with meme tokens
According to Dune Analytics, the meme-token longchamp debuted on the market in January and reached $100 million in revenue in just 217 days. That’s 34 days less than it took the next fastest-growing protocol called ENA to reach a similar revenue milestone for its creators.
DeFi protocol records to reach the $100 million revenue mark
In an interview with Decrypt reporters, analyst Ryan Watkins of Syncracy Capital explained the secret behind pump.fun’s success. Here is his rejoinder on the matter.
Pump.fun’s record revenue growth is partly due to the fact that the platform appeals most to retail speculators, but also because it charges the highest fees of any DEX on the network.
Other fast-growing protocols on the list include CVX, CAKE and AERO. It took them 306, 325 and 338 days respectively to reach $100 million in revenue. In general, the revenue of decentralised finance protocols is made up of the total commission they charge their users, minus the portion paid to liquidity providers.
Growth of pump.fun’s revenue from commissions
Pump.fun’s popularity has declined significantly recently, with meme tokens on Solana generally proving to be one of the most unprofitable investments in crypto over the past week.
On average, their price has sagged 21.7 percent. Importantly, pump.fun accounted for 5,388 new tokens created on Solana on Saturday. At the same time, just three weeks ago, the protocol reached its peak – then 20,465 tokens were launched with its help in a day.
Daily chart of Solana SOL cryptocurrency rate
The weakening of interest in meme tokens has also spread to altcoins created outside the pump.fun platform. We’re talking about sphere favourites like Dogwifhat (WIF), Bonk (BONK) and Popcat (POPCAT). They were down 10, 11 and 9 per cent respectively for the week.
Largest meme tokens by market capitalisation
The rapid growth of pump.fun’s popularity was one of the main factors behind the high activity on the Solana network. However, against the backdrop of the so-called sideways trend in the coin market, traders are searching for another ecosystem with promising decentralised platforms.
In particular, Pump.fun began to lose popularity after the appearance of SunPump – a similar protocol from Justin Sun in the Tron network. It was there that several HYIP projects appeared the day before, which brought income to investors for a short period of time, the sources said.
Meanwhile, trading volumes continue to grow on centralised crypto exchanges (CEX). The monthly volume of spot transactions on such platforms, including Binance and Coinbase, reached $1.2 trillion in August.
By comparison, back in July, this figure was $1.12 trillion, which means the growth here was 6.6 per cent. The largest market share in August was taken by Binance, which had a trading volume of $448.45 billion, The Block notes.
Monthly trading volumes on centralised cryptocurrency exchanges
Monthly trading volumes on centralised exchanges, which dominate North America, also increased in August. For this region, the figure was recorded at $166.84 billion, although it was at $137.17 billion in July. Accordingly, the growth is equivalent to 21.6 per cent.
Crypto.com captured the largest share of trading volume on exchanges clearly dominated by North America. The amount of transactions on this platform rose to $95.77 billion in August.
Monthly trading volumes on exchanges in North America
The August statistics for centralised exchanges reflect a continuing upward trend in trading volume over the summer, although the trend was still downward by June.
In 2024, exchange trading volume for the month peaked in March. At that time, the figure was $2.48 trillion, which coincided with the Bitcoin price reaching an all-time high.
The situation with meme tokens reflects the general trend in the coin market. In general, what is happening in crypto now seems boring, due to which traders are looking for any opportunity to make money. This forces them, among other things, to look for alternative platforms on other networks as long as they are in demand. However, it is obvious that as the market growth resumes, the same new memes will be launched with the same intensity.
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