Cryptocurrency trading volume declines, Solana investment commodity net outflow hits record high
According to Cointelegraph, 60% of pump.fun traders are losing money on the platform, while only 3% of traders have made gains exceeding $1000. In addition, the trading volume of Solana based memes is rapidly declining, dropping as much as 80% in the past two weeks, which has intensified the skepticism of memes skeptics and sparked a long-standing debate within the cryptocurrency community about memes.
Memecoin cooling down, Solana net outflow sets record
According to the latest report from CoinShares, Solana based digital investment commodities saw a record outflow of $39 million last week. CoinShares attributed the surge in capital outflows to a sharp decline in cryptocurrency trading volume and stated that the current Solana network activity and coin price heavily rely on cryptocurrency.
The 'destructiveness' of meme coins
Messari's data engineer Mike Kremer pointed out in an article on August 19th that memes are the "most exploitative cryptocurrency phenomenon" since the ICO boom in 2017.
Mike Kremer pointed out that although speculative foam and assets have always been part of the crypto ecosystem, the past crypto currency trends have always left some residual value. For example, in the 2020 DeFi Summer, projects like Uniswap Labs launched protocols that provide practical utility for the cryptocurrency economy. Even after the speculative frenzy subsides, these tokens still have potential value because they are associated with running, valuable services.
However, Mike Kremer believes that memes have a "more destructive" dynamic. He pointed out that insiders or groups created tokens like SupercumRocket69 and then used speculation to attract retail investors to bid on these so-called 'revolutionary' new assets. Once the price expands, insiders will sell their tokens, leaving behind tokens with no real value or utility. Kremer believes that this process is a zero sum game, where value is not only redistributed but also destroyed.
Controversy over Pump.fun platform
Recently, Solana's meme coin issuance platform pump.fun has also become a controversial focus. Critics argue that the platform has made memes more dangerous and diluted than ever before. Since its launch in January this year, over 1.8 million new tokens have been issued on the platform, but less than 1.5% of them have a total value exceeding $63000. In addition, the data also shows that 60% of pump.fun traders are losing money on the platform, while only 3% of traders have made gains exceeding $1000.
Does Meme Coin still have a positive impact on the cryptocurrency industry?
However, there are still different opinions on whether memecoin is beneficial to the cryptocurrency ecosystem. Alon, the pseudonymous developer of pump.fun platform, stated that the market clearly believes that reducing the deployment cost of memes is a good thing. He pointed out that every iteration of meme related technology has enabled more people to enter the cryptocurrency market, making meme almost ready for large-scale adoption.
In addition, some people believe that memes are a net positive for the cryptocurrency industry, as they provide a "simple" entry point for beginners despite their higher risks. In April of this year, Avalanche founder Emin G ü n Sirer stated in an interview that although memes are essentially worthless, they are still very useful for "transmitting social signals" and forming a strong cryptocurrency community. Emin G ü n Sirer believes that memes are beneficial for this field because they attract people's attention, keeping them excited, busy, and focused on what technology can do.
