Since the start of April, the cryptocurrency market has experienced the launch of more than 1 million new tokens. Leading the way in this token frenzy are Ethereum and Solana. Ethereum has hosted over 370,000 new tokens, while Solana has an impressive 640,000 new tokens, primarily consisting of memecoins, according to data from a Dune Analytics dashboard.
On the Ethereum network alone, an astonishing 372,642 new tokens have emerged since April 1. Notably, 88% of these tokens, amounting to 327,553, were launched on Coinbase’s layer-2 blockchain Base. The surge in activity on the layer-2 network can be attributed to the growing interest in memecoins, as users are attracted to the low-cost environment for creating these types of tokens. In fact, Conor Grogan, director at Coinbase, highlighted that the number of tokens created on Base within this short timeframe is twice the total number of tokens created on Ethereum from 2015 to 2023.
Simultaneously, Solana has witnessed a significant influx of new tokens, with an astonishing 643,227 tokens created since April. Of these, approximately 466,914 tokens were memecoins, according to data from Step Finance. The popularity of memecoins on Solana is evident, as a dedicated dashboard tracking the number of new tokens launched on the Solana-based memecoin platform pump.fun confirms this trend.
The rise of memecoins has sparked mixed reactions within the crypto community. Some argue that the proliferation of memecoins has had a negative impact on the industry, leading to an increase in scams and rug pulls. Critics view the abundance of memecoins as a diversion of funds from more legitimate projects, pointing out that scammers now possess real money that could have been invested in projects with genuine potential.
The surge in new memecoins has also raised concerns about spam and the use of sniper bots. These automated bots, designed to quickly acquire new memecoins in hopes of profiting from a potential breakout, are seen as a hindrance to the ecosystem. They contribute to the perception of memecoins as a speculative and volatile segment of the market.
Despite the criticisms and concerns surrounding memecoins, they have proven to be a profitable narrative in the first quarter of the year. In fact, Solana meme coin presale scams have amassed a staggering $150 million in SOL from just 33 presales. However, analysts have emphasized that many of these projects, often promoted by smaller accounts, are either dubious or outright scams. The lack of transparency and accountability within the meme coin space on Solana further heightens the risk for investors due to the prevalence of rug pulls and disappearing funds.
Andrei Grachev, Managing Partner at DWF Labs, has recently cautioned against such token presales, comparing them to the ICO boom in 2017.