Solana Memecoin Trading Volume Decline Sparks More Skeptical Debates

Solana-based memecoin recorded a drastic decline in trading volumes recently. Consequently, some traders witnessed losses as many investors quickly pulled out funds, resulting in massive outflows.

Moreover, the downward trend has spiked more skeptical debates as opponents get louder.

Memecoin Mania Killed Retail Wallets, Says Kremer

Solana-based memecoin witnessed a drop in trading volume this week, with recent data suggesting losses among many traders. The trend has spiked more debates in the crypto space as many skeptics get more vocal in their criticism.

Mike Kremer, a Data Engineer at Messari, expressed his opinion on the trend via a newsletter on August 19. The engineer argued over the negative impact of memecoin mania on retail investors.

oh no, we let @mikeykremer write the newsletter today pic.twitter.com/UjSnKykSKw

- Eric Turner (@ericturnr) August 19, 2024

According to Kremer, memecoins are the most extractive crypto phenomenon" following the 2017 ICO boom.

The engineer emphasized that speculative bubbles remain an essential pattern of the crypto ecosystem. However, the increased rush towards the latest fads in the crypto market always leaves some residual value behind.

He noted that Unlike meme coins, DeFi offers more value. For example, during DeFi Summer, projects like Uniswap Labs launched some protocols with real utility.

Kremer explained that even after the speculative frenzy waned, the tokens retained some underlying value because the projects offered valuable services. The continuity of these services ensured their sustainability.

However, Kremer believes the pattern is entirely different for memecoins, which often come with more excellent destructive dynamics.

For memecoins, insiders or cartels launch tokens like supercumrocket69, hype and exaggerate their value. They lure retail investors into investing in the seemingly revolutionary' new assets," Kremer explained.

However, the developers dump protocols without utility or real value, particularly when prices drop. He described the entire process as a zero-sum game without value redistribution but rather destruction.

Solana Records $39 Million In Outflows Amid Deployer Dilutive Stance

Kremer's debate came amid growing criticism against a Solana-based memecoin deployer Pump.fun. Moreover, some crypto observers indicated that the platform had made memecoins more dilutive and treacherous.

Since its launch in January this year, Pump.fun has witnessed the development of over 1.7 million new tokens. However, less than 1.5% of these protocols have hit a total value of over $63,000.

In addition, recent data about Pump.fun traders indicated that about 60% have lost money while 4.7% have made no money. Meanwhile, 3% and 0.5% of the traders on the platform gained over $1,000 and $10,000, respectively.

Meanwhile, Solana-based memecoins have witnessed a drastic decline in trading volumes. Data indicated that the net volume plummeted by over 80% within the past two weeks.

According to the latest CoinShares report, Solana-based crypto products suffered a whopping $39 million in outflows last week. The data reflects the largest on record for the period.

Conversely, other prominent crypto funds amassed some inflows over the last week. Bitcoin ETFs led the record with $42 million inflows, while Ethereum funds saw $4.2 million.

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