Solana Network Activity Surges, Eclipsing Ethereum Amid Memecoin Craze

By Jody McDonald March 20, 2024 In Ethereum, Memecoins, Solana
  • A memecoin-driven surge in activity on Solana over the weekend saw the network’s daily trading volume overshadow that of Ethereum on Saturday.
  • According to analysis by X user Dagnum_PI, Solana’s increased activity led to blowouts in latency and a flood of failed transactions.
  • Observers question if the growth in memecoins, particularly on Solana, is good for crypto.

A surge in activity on Solana over the weekend has seen the network’s daily trading volume eclipse that of Ethereum, the second-largest crypto by market cap. The flurry of activity was driven by massive interest in several Solana-based meme coins

Related: Bloomberg Analyst Predicts Spot Ethereum ETF Rejection in May

According to DeFiLlama, Solana’s trading volume on Saturday hit a whopping US$3.52 billion (AU$5.38 billion), easily outdoing Ethereum’s total of US$2.4 billion (AU$3.7 billion).


However, as is often the case with Solana, this surge caused some issues with the network, with latency times blowing out to over half a minute and many users reporting failed transactions.


Continued Memecoin FOMO Driving Solana Activity

In the past week, several memecoins have contributed to taking Solana’s recent memecoin frenzy to new heights. In particular:

  • Book Of Meme (BOME) which went from a market cap of almost zero to US$1.45 billion (AU$2.2 billion) in 56 hours; and
  • Nap (NAP) which went from a market cap of around US$30 million (AU$45.9 million) to US$330 million (AU$505 million) in under a day.
  • Other memecoins such as BONK, SHIBA, WIF and SLERF have also contributed to this increase in trading volume.

According to network analysis from X user Dagnum_PI the increased activity led to significant issues, causing ping times to blow out to between 20 and 40 seconds. At the height of activity, this resulted in 50-80% of transactions failing.

Dagnum_PI also suggested that Solana’s claimed maximum throughput of 50,000 transactions per second (TPS) is just marketing—suggesting that in reality the maximum observed throughput has for several years been around 1100-1200, and that comes with increased latency and failed transactions.

The memecoin frenzy also contributed to Solana’s native token, SOL, increasing in value. At one stage it climbed to over US$208 (AU$318) and overtook BNB as the fourth-largest cryptocurrency by market cap. In the past few days though the market correction has seen SOL drop back to fifth place according to CoinGecko, currently changing hands at just over US$172 (AU$263).

Are Memecoins Good For Crypto?

Pro-memecoin pundits say they’re good for crypto, creating hype and introducing the technology to new users. However, as the memecoin frenzy, on Solana in particular, gets more and more frothy an increasing number of observers are starting to raise concerns.

Related: MicroStrategy Buys Additional Bitcoin, Now Holds 1% of Total Supply

One concern is that memecoins draw attention away from the legitimate uses of decentralised ledger technology and do nothing to move the industry forward:

Another issue is that ‘investing’ in memecoins is essentially gambling—many memecoins end as rug pulls, but even the coins that aren’t straight-up scams are risky investments. Frequently investors end up losing on memecoins because these coins are so hype-driven and volatile, often by the time you know a memecoin exists it’s far too late to make any money investing in it.

Jody McDonald

Jody McDonald

Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.

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