News
04
Jun
solana tokens

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Almost half a million tokens were created on Solana in May

In May, 455,000 new tokens were created on the Solana platform, a new record in crypto history. Most of the new tokens were meme coins.

Solana has emerged as the leading “meme casino” in the crypto space this year by a significant margin. BNB Chain previously held this title. Between 2021 and 2023, as many new tokens were created on the BNB Chain as on all other smart contract platforms combined.

BNB Chain has lost its popularity not only to Solana but also to Ethereum’s Layer 2s. After Solana, the most popular meme casino is Base, a Layer 2, launched by Coinbase. As many as 229,000 new tokens were created on Base in April. The number for May is also quite large: 177,000 tokens.

The graphic below shows the popularity of Solana and Base.

theblock tokens

Data source: The Block Pro

BNB Chain still holds the pole position historically. Over 3.7 million tokens have been created on the BNB Chain over the years, while Solana’s count is 1.4 million tokens. Just under a million tokens have been created on Ethereum.

The term token can be confusing to novice readers. Does a token mean the same thing as cryptocurrency or crypto? Colloquially, yes, but strictly speaking, no. Colloquially, the term cryptocurrency (crypto) refers to all coins in the market, be they cryptocurrencies, tokens, stablecoins, or whatever.

Technically speaking, there is a clear difference between cryptos and tokens:

  • A token is created on a smart contract platform such as Ethereum or Solana, which means it uses an existing blockchain. The creation and transfer of the token are paid for with the native token of the smart contract platform. For example, Chainlink (LINK) is a token on the Ethereum platform. If you transfer LINK tokens from one wallet to another, you pay for the transfer with Ether (ETH).
  • A cryptocurrency has a dedicated blockchain. For example, Bitcoin, Dogecoin, and Litecoin are cryptocurrencies.

The popularity of tokens has exploded in the 2020s with the popularity of smart contract platforms and DeFi. Anyone can create a token on a smart contract platform in minutes.

Decentralized exchanges, or DEXs, enable token trading. You can provide liquidity for your token on a DEX without any restrictions. In the past, centralized exchanges acted as the gatekeepers of cryptos, preventing most meme coins not entering the market.

Creating a cryptocurrency is significantly more challenging because a sufficiently secure and decentralized network of validators (miners) must also be created in addition to the blockchain. Because of this, new cryptos come to the market quite rarely.

Meme coins are trendy

A significant majority of the tokens created are meme coins. A meme coin is a token (or cryptocurrency) whose value comes mostly or entirely from an online community and memes.

Meme coins have no real purpose or use case. Their popularity is based on the online that forms around the token. People want to belong to communities, and buying a meme token is like buying an entrance ticket. The more popular a meme coin becomes, the more people want to buy it.

Drastic price fluctuations characterize meme coins. A token can multiply its value in a few minutes, but when liquidity disappears, its value can drop to zero just as quickly.

Memes are created from all possible topics. Historically, dog-themed meme coins have been popular. This year we have seen meme coins about US politicians. Tokens such as BODEN and TRUMP have been created on the Solana platform.

memecoins

Why has Solana become such a popular meme platform? It offers fast and cheap transactions and good enough capacity. Sure, Solana has suffered from performance issues, but its network handles thousands of transactions per second more than 99 percent of the time.

Solana’s Phantom wallet is also popular and easy to use. Beginners can start trading for memes easily and quickly. We will likely see a month during this cycle where a million new tokens are created on Solana in a single month!

AboutBitcoin Team

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