Explosion of Meme-Based Tokens Marks Historic Rise in Cryptocurrency Market
Summary:
Since April, over 1 million new tokens have emerged, with Ethereum and Solana hosting 370,000 and 640,000 respectively, primarily memecoins. This flurry in token creation has doubled Ethereum's eight-year total within months on Coinbase's Base layer-2 blockchain network. Despite some criticism from the crypto community citing proliferation of scams, memecoins showed significant profitability in the first quarter. CoinGecko has even introduced a memecoin category listing 600 coins valued at a combined $52.7 billion.
From the beginning of April, over 1 million novel tokens have appeared, with Ethereum hosting more than 370,000 and Solana hosting over 640,000, the majority of which are meme-based cryptocurrencies. Since the start of April, Ethereum has seen 372,642 fresh tokens, nearly 88% (327,553) of which, were seen on Coinbase's layer-2 blockchain Base. This layer-2 network's explosion of activity is primarily due to those seeking a low-cost network for creating new memecoins.
According to a post on May 14 by Coinbase's Conor Grogan, the number of tokens created on this network was claimed to be double the total number of tokens Ethereum has produced from 2015 to 2023. Layer-2's total value locked (TVL) has seen an impressive 630% jump since the beginning of the year, according to L2beat. This rise is mostly driven by a broader craze for meme-based cryptocurrencies.
In the meantime, Solana saw the creation of 643,227 new tokens in the same period, as per data from analytics platform Step Finance. Of the total, 466,914 were memecoins, revealed by a dashboard from Dune Analytics tracking new tokens on the Solana-based memecoin platform pump.fun.
Within the past 30 days, the leading 500 fresh tokens added to CoinMarketCap’s platform are primarily memecoins. CoinGecko, a prominent crypto analytics platform, has now included a memecoin category, listing over 600 coins with a combined market cap of $52.7 billion. This figure is nearly half of Tether's USDT market cap.
Grogan's post was met with criticism from crypto enthusiasts, many arguing that memecoins were tarnishing the values of cryptocurrency. Some even referred to it as a "net negative" because of the increased scam and rug pull incidents. Critics stated that legitimate projects were missing out on potential investments due to this growth of fraudulent activities.
In contrast, some have denoted the rise in memecoin numbers as a method to attract automated buying programs in anticipation of a breakout. In an April report by Cointelegraph, a study revealed one in six new Base memecoins were scams and more than 90% of them were vulnerable. However, during the first quarter, memecoins were identified as the most profitable category in the crypto market, according to a Cointelegraph report from April.
Published At
5/15/2024 8:14:44 AM
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