Every bull market is driven by some strong narratives. Memecoins were by far the most profitable crypto narrative in Q1 2024, having recorded returns of 1313% on average across its top tokens.
Source: X
For a long time, the central hub for memecoins has been Ethereum with little competition. Off late, there has been a shift in activity to Solana and Base. Solana's memecoin market cap is now at $7.6 billion and Base's $1.4 billion. Today, we compare the two chains to see the latest trends in this space.
Solana
Solana (SOL) has been on a tear in the past few months. SOL crossed $200 a token last month even as network activity continued to grow rapidly on the back of the memecoin frenzy.
The daily active users in the ecosystem more than doubled from January to March this year.
Top Performers
Performers like Dogwifhat (WIF) and Bonk (BONK), alongside newer entrants such as Book of Meme (BOME) and Slerf (SLERF) have made significant strides lately.
On 28th March, following the sentencing of FTX co-founder Sam Bankman-Fried, multiple memecoins spun up to piggyback on the news, surging over 30,000% in value before plummeting.
Source: CoinGecko
There has been a surge in presales for memecoin launches on Solana, with 33 presales conducted since 12th March, raising over 796K SOL. These presales, driven by FOMO, have led to significant price gains, as seen with the example of the Book of Meme presale, which saw a coin surge of over 2700% in less than two days.
Source: X
Network congestion
The heightened activity has led to a network congestion on Solana, resulting in delayed or failed transactions across the chain. While this does not look ideal for a chain that sits 5th on the crypto market cap list, it reflects on the bullish stance of the ecosystem and the faith the community has on the network.
Source: X
Despite these hurdles, the Solana ecosystem continues to exude a sense of excitement and attract substantial user engagement and liquidity, even in the face of the recent market correction.
Base
Memecoin mania has migrated onto Base, with the network’s memecoin sector surpassing a $1 billion market cap after its explosive growth over the past month. Base does not have its token yet on the blockchain similar to SOL for Solana. This means that memecoins have been a proxy for network activity and growth of Base.
Network activity on the Coinbase-backed Layer-2 network Base continues to thrive, with daily transactions and trading volume hitting unprecedented highs. On April 3, the layer-2 network hosted over 2.7 million transactions– an all-time high, according to a Dune analytics dashboard.
Source: Dune
TVL is on the rise
After a large run in Q3 last year, Base’s TVL stayed mostly flat until the end of February. Since 25th February, TVL on Base is up almost 310%.
Source: L2 Beat
On 28th March, crypto infrastructure provider Syndicate launched Degen Chain, a L3 network, which serves as a specialized ultra-low-cost network to perform transactions using the DEGEN token.
It rapidly gained popularity, attracting over 130,000 addresses, and more than $50 million in total value locked (TVL), within a few days post-launch. This L3 network is flooded with memecoins, which saw over $40 million in daily trading volume.
DEGEN is also among the top gainers as the project finds new utility within dapps building on Base. Trailing second is Brett (BRETT), the largest meme coin on Base by market cap.
Source: CoinGecko
Key takeaway
Memecoins are usually risky and are better avoided for a risk-averse portfolio. However, they also make blockchains more relevant and appealing for users. Solana, and now Base, have triggered their adoption metrics, thanks to immense growth in memecoin trading on their networks. They have been aided by low network fees on the networks – something that Ethereum is fighting to solve for.
Both Solana and Base have great potential. SOL, as a native token of Solana, has outperformed BTC and ETH in the last year and will likely be a winner in the upcoming 12 months. Base may launch its own token in upcoming months – if they do, there may be a case for investing in it. Else, memecoins on Base act as proxy for network growth – do consider a small part of your portfolio on them.
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