Recent gains made by Solana-based meme coins have resulted in a significant surge in transaction volume and on-chain DEX activity on the blockchain. This has resulted in SOL experiencing an exceptional uptrend, recording a year-to-date surge of a staggering 625%.
Meme coins played a major role in amplifying the blockchain’s growth during that period. According to data from CoinGecko, Solana-based tokens such as Dogwifhat (WIF), Myro (MYRO), Bonk (BONK), Popcat (POPCAT), and Book of Meme (BOME) led the rally after having witnessed remarkable growth rates of 574%, 3200%, 49%, and 1000%, respectively.
The popularity of Meme Coins led to Increased Trading Activity on Solana DEXs
The rising popularity of meme coins even prompted an increase in trading volume on Solana-based decentralized exchanges (DEXs), highlighting investors’ interest and participation in the ecosystem. On March 16th, major Solana meme coins like BONK, WIF, TREMP, BODEN, and BOME recorded a cumulative trading volume of $1.33 billion.
However, this unprecedented rally has had its fair share of ramifications for Solana, like rising transaction fees, increased transaction failure, and increased bot activity.
An analysis of Solana made by 21Shares showed that transaction fees on the blockchain have increased by two to three times. Despite the increase, the average gas fee on Solana is $0.06580, which is cheaper than most Layer-2 scaling solutions on Ethereum even after the recent Duncun upgrade.
Analysts Hold Bot Activity Responsible for 70% of Failed Transactions on Solana
The rise in meme coins and their related activities on Solana has attracted bots that spam the network. These bots seek to exploit potential income-generating opportunities for real users, resulting in a notable increase in failed transactions on the decentralized ecosystem.
Blockchain researcher and analyst Tom Wan reported that over 70% of the failed transactions can be attributed to bots spamming the network, severely affecting Solana’s efficiency. On the other hand, only 17% of the transaction failure was caused by organic users.
Solana is the Most Popular Blockchain so far in 2024
As per recent research, Solana is on track to dominate global investor interest in blockchain networks, far outpacing other ecosystems. The so-called Ethereum killer’s growing popularity among crypto users has helped it reclaim its record highs from 2021.
Investors worldwide are drawn to Solana’s potential for innovation and growth, marked by the success of many notable projects within the blockchain, such as Pyth – an institutional-grade market data oracle network.
Between January 1 and March 18, 2024, Solana was responsible for nearly 50% of the global traffic share of blockchain ecosystems. Ethereum, which is the largest blockchain by market cap after Bitcoin, could only garner 12.73% of global investor interest during that time. This shows how dominant and popular Solana has been since the end of last year.
While Solana has emerged as a force to be reckoned with, Ethereum continues to have a significant stronghold over the industry. Ethereum’s continued relevance can be linked to its well-established presence and familiarity among investors.
With a 5.4% stake in year-to-date investor interest, the third most popular blockchain of the year is Binance’s BNB Smart Chain ecosystem.
At the time of writing, Solana (SOL) is trading at $172.42 – down nearly 4% in the last 24 hours. The fifth-largest cryptocurrency by market cap has been facing a price correction for the past week.
