coindesk.com
The Solana ecosystem allure seemed to lull this week as native tokens from major projects by market capitalization snapped down from multiweek bull runs hinting at profit-taking from early investors.
Data from Coingecko shows meme coin bonk (BONK) fell 13% in the past 24 hours, dogwifhat (WIF) dropped 15%, while smaller but hyped token analos (ANALOS) dropped over 50%.
Tokens of decentralized exchange Orca (ORCA) slid 9%, while Jito's JTO - a governance token - dropped 6%. SOL prices slumped approximately 4% before recovering, with futures traders taking on $13 million in losses in liquidations the past 24 hours.
Pullbacks were likely a sign of profit-taking from early investors in these projects, who probably made significant returns on their initial positions as prices jumped.
Meanwhile, trading volumes on Solana-based decentralized exchange (DEX) applications remained high, with tokens worth $1.44 billion changing hands in the past 24 hours. That accounted for 26% of all DEX trading volumes across the crypto space, higher than usual players Ethereum, Arbitrum and BNB Chain.
The Solana ecosystem boomed early this month as bonk tokens started a multiweek run of over 1,000%, grabbing listings on influential exchanges Binance and Coinbase.
That seemingly kickstarted activity on the network, with prices of Solana's Saga phone flying to over $5,000 – despite being unable to sell out as recently as October – and SOL market capitalization quickly flipping other large tokens.
Solana also became the strongest draw among on-chain traders, metrics from last week show, with trading volumes and network fees crossing those of Ethereum – usually the highest – on a seven-day rolling basis.
Hype for the blockchain's speedy transactions, cheap fees, and a lottery of meme coin issuances seemingly jumpstarted the network since early December, pushing SOL token prices to nearly $120 from $38 at the start of November.
Value locked on Solana applications grew in tandem, rising to $1.3 billion worth of tokens from the $400 million mark in November to reach levels previously seen in July 2022.
But the quick flips on small-cap tokens seemed to have attracted hoards of new memecoin issuances, most of which last just a few days before falling as much as 90%.
Rug pulls, a term for a developer erasing liquidity from a token they issued, seem to run rampant as of Wednesday, data from Birdeye shows.