Here is a cycle I believe long-standing crypto investors have seen so many times. A hype builds up, the prices surge, and boom, just as quickly as the surge, a dip that makes newbies lose interest in the field and probably comes back when a new thing starts making news. At the time of writing this blog, SOL, the native coin of the Solana chain, is taking some hits, and that's brought it down to about 40% of its recent value. Some are calling it the end of an era, but I see it as a reality check much needed.
I think, and it's my opinion, that Solana didn't necessarily become popular because of some groundbreaking innovation. I believe it was the memes that did the job. People rushed in hoping for some overnight millionaire status, which well was the proposition memes gave. Memes are just minting tokens with no real value or underlying utility that would make it sustainable. The other thing was, insiders (creators and their early investors) had the upper hand, and that gave them the opportunity to take billions from retail investors following the hype.
Well now the hype seems to be dying and it now looks like Solana is feeling the consequences. But that doesn't mean the chain is doomed or something; it simply means the speculation is cooling off, and now we are getting down to value in utility.
Again, this shows a bigger issue in the crypto world.
It's so easy for retail traders to get lured into games they just can't win. I don't see meme coins as more about community or innovation, but a structured way to transfer wealth from people. The insiders made millions and the simple-minded traders were left holding some worthless tokens. And that's not even surprising or peculiar to meme coins only; it's the same cycle that has played out over and over in the crypto world. Now I love the crypto world, and I think it's a great place to invest and have freedom, but the downside is if you are new and don't know a lot, you can easily fall for this.
Anyway, let's compare Solana to its kind of competitor Ethereum:
ETH briefly surged past 2,800 dollars and came back to 2,600. The interesting thing about ETH is that it doesn't rely on short-term speculations unlike the Solana meme economy. It has a DeFi, real-world application and long-term developers. That doesn't also mean ETH is immune to some market swings, but it's obvious which ecosystem is built for more than just the hype.
Am I against Solana? Heck No! The tech is super solid, the chain is faster compared to ETH and well, yeah, cheaper, but I think it needs more than meme coins to sustain long-term growth. If this crash dip pushes the developers to focus more on real projects instead of only the meme coins, I believe it could actually be a good thing. Solana is far from dead; I only think it needs some evolving to do the trick.
Would love your thoughts in the comments.
Source of images used is from pixabay and unsplash
Links:
https://pixabay.com/vectors/crypto-icons-cryptocurrencies-7585234/
https://unsplash.com/photos/a-building-with-a-cone-on-top-aCqAjF3TRf4