Coin Edition -
- Explosive growth in memecoin creation on Solana and Ethereum networks indicates a fervent speculation trend in the crypto market.
- Coinbase’s Base sees a significant uptick in token launches, driven by cost-effective transactions and the memecoin frenzy.
- While memecoin mania fuels market excitement, concerns linger regarding scams and the potential diversion of investment from genuine crypto projects.
The cryptocurrency market has witnessed a surge in token creation, with over one million new tokens launched since April. This explosion, driven largely by the explosion of memecoins, has raised concerns about speculation and potential scams.
Nearly half of the newly created tokens, exceeding 640,000 tokens, were launched on the Solana network. Ethereum, the leading smart contract platform, also saw a substantial influx of new tokens, with over 370,000 created during the same period.
This surge in token creation is particularly evident on Coinbase’s layer-2 blockchain, Base. The platform has seen a staggering 88% increase in token creation compared to Ethereum with 372,642 new tokens launched. The low transaction fees offered by Base is believed to be a major factor attracting users to capitalize on the memecoin frenzy.
Coinbase (NASDAQ:COIN) director Conor Grogan underscored the magnitude of the current memecoin craze, noting that the number of tokens created on Base surpassed all of tokens created on Ethereum from 2015 until 2023.
There were nearly 1 million new crypto tokens created in the last month, a number that is 2x the total number ever made on Ethereum from 2015-2023 pic.twitter.com/Dg7On7Muny— Conor (@jconorgrogan) May 14, 2024
Furthermore, the Total Value Locked (TVL) on Base has skyrocketed by approximately 630% since the beginning of 2024, as reported by L2beat, driven primarily by the memecoin mania that has gripped the crypto space.
Solana also has seen a significant influx of these memecoins, with 466,914 out of 643,227 tokens falling into this category, according to data from Step Finance. This proliferation of memecoins has led to the creation of dedicated categories on platforms like CoinGecko, listing over 600 coins with a combined market capitalization of $52.7 billion. Nonetheless, CoinMarketCap has added a category specifically for memecoins, listing the 500 newest tokens added to its platform in the last 30 days.
but that’s even worse⠀They launch, rug retail for a few eth⠀That’s real money that could have went into bigger “legit” projects⠀Instead it’s now in the hands of the scammer, who will cash it into fiat⠀Net negative, don’t let anyone gaslight you otherwise⠀Dilution…— Talented Gamblers (@TalentedGamblrs) May 14, 2024
However, the memecoin craze has its critics. Some within the cryptocurrency community view memecoins as a negative development, citing their susceptibility to scams and “rug pulls” (abrupt abandonment by developers). Critics argue that investments in memecoins could be better directed towards more established and legitimate projects.
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