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Solana DEX Volume Resilient Amid Rug Pulls: SLERF Survives, Memecoin Performance Mirrors Ethereum

Published April 23, 2024 2:19 PM
Valdrin Tahiri
Published April 23, 2024 2:19 PM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • The Solana DEX volume for March and April trails only Ethereum.
  • A number of memecoins in Solana rug pulled in March after presales.
  • Solana memecoins have performed the same as those on Ethereum.

Solana decentralized exchange volumes (DEX) have seen a resurgence in 2024, but dipped in April, aided by a series of rug pulls from memecoins that conducted presales. Presales have historically been associated with increased risks due to the possibility of the creators not delivering on their promises.

However, meteoric increases have also been seen in such projects, providing a high-risk, high-reward environment. In the wake of the recent rug pulls shaking Solana’s memecoin scene, the question arises: Do the surviving memecoins promise greater rewards, or does this not hold true?

Solana DEX Volume Only Trails Ethereum

In March, the Solana DEX volume reached an all-time high of $60 billion, trailing only Ethereum’s $77 billion. This was a new all-time high for the blockchain, driven by memecoins and liquid staking.

So far in April, Solana has $27 billion in volume. While this is still in second place, trailing Ethereum’s $51 billion, it is less than the $60 billion in March. Even taking into account the fact that the month is not over yet, Solana will have $35 billion in volume at the end of the month if it maintains the same ratio.

Solana DEX Volume
Solana DEX Volume | Credit: DeFiLlama

In Solana, the highest volume is from the Raydium DEX, followed by Orca. While Raydium is mostly used for memecoin trading, Orca’s main use case is liquid staking.

The decrease in DEX volume can be attributed to the $26 million rug pull relating to Solana memecoin presales. More specifically, 12 Solana presale meme coins were abandoned in March.What is interesting is that roughly $122 million were raised  for memecoin presales, but “only” $26 million have been raised by projects that have already rug pulled.

Projects often do presales in order to raise funds for building. However, memecoins lack a developmental purpose, rendering presales unnecessary.

Even though these memecoins were launched on Solana and greatly increased volume for the blockchain, Solana’s founder Anatoly Yakovenko  shares the sentiment that presales for them are useless and users should not take part in them.

What Happened to Memecoins That Did Not Rug?

Leaving aside memecoins that have rug pulled, those that have not have not fared much better.

The memecoin that raised the most money in its presale, SMOLE,  is already down 55% since its launch and is ranked #2498 based on its market capitalization. In fact, its market capitalization of $22 million is less than the $26 million it raised in the presale.

The second biggest raiser is GM, which is not a memecoin. Rather, it is the “AI operating layer of Solana”. The team frequently updates  about new developments and builds but has not launched  its token yet. Conceptually, a presale for an AI operating layer makes more sense than one for a memecoin.

The third biggest beneficiary is SNAP , which has fallen over 40% since its launch. This holds true for the next Solana memecoin that has not rug pulled, SHROOM . Its price  is down nearly 50% since its launch.

So, this underscores the extreme volatility and risks associated with memecoins, even if they do not rug, which is not a certainty in itself.

SLERF Stands Alone

Among the memecoins that raised funds through presales, only SLERF achieves a ranking within the top #500. Furthermore, it is the sole memecoin making headway by securing listings on multiple centralized exchanges like Gate.io, HTX, and Bitget.

Finally, SLERF still ranks in the top 3 highest volumes in Solana’s main decentralized exchange, Raydium. In fact, the SLERF price has broken out from its descending resistance trend line on April 17, though it has yet to make its first higher low.

SLERF Price Breakout
SLERF/USDT Daily Chart | Credit: TradingView

In Raydium, the highest volume belongs to GUMMY. Despite its massive volume, GUMMY is not an established memecoin yet. Rather, it is ranked #2445 based on its market capitalization and is not listed in any centralized exchanges, though its funder has stated that he has offers to do so.

 

Finally, POPCAT is the only memecoin in the top 10 in both ORCA and Raydium, ranked #7 in the former and #2 in the latter.

POPCAT All-Time High
POPCAT/USDT Daily Chart | Credit: TradingView

POPCAT, currently ranked #226 based on its market capitalization, lists on Gate.io, MEXC, and CoineX. The memecoin reached its highest ever daily close yesterday but failed to reach a new all-time high today.

To conclude, nearly none of the memecoins that raised money in a presale in March gained any traction after launch. SLERF stands out as the sole exception, since despite its negative performance, securing listings on several exchanges.

Solana Memecoin Performance Parallels Ethereum

Due to the risks associated with Solana memecoins, it is interesting to look at their performance relative to their more established counterparts in Ethereum.

Interestingly, the high-risk, high-reward mantra does not hold true in this case. A basket of the biggest memecoins in Solana has performed only incrementally better than the basket of memecoins in Ethereum.

In the past 30 days, the Solana memecoin basket (blue) has fallen by 11%. The Ethereum decrease (orange) is comparable at 15%.

Solana vs Ethereum Memecoins
Custom Daily Chart | Credit: TradingView

Considering the risks associated with Solana memecoins and the bad reputation they have gotten due to the racist memecoins, it does not seem the increase in risk is rewarded with higher returns.

Rather, more established memecoins in Ethereum which have less risks apparently provide the same returns as their counterparts in Solana.

Higher Risks Do Not Lead to Higher Rewards

Despite the resurgence of Solana DEX volumes, recent rug pulls from memecoins conducting presales have raised concerns about their viability. While some surviving memecoins show promise, the overall performance indicates comparable reward levels to Ethereum memecoins despite higher risks.

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