$SOL: +28% – The Solana blockchain got a major boost last week with the launch of the Bonk Inu (BONK) coin (a new Shiba Inu-themed meme coin) on it. A team created Solana blockchain’s first dog-themed token, driven by the immense successes of Dogecoin (DOGE) on its blockchain and Shiba Inu (SHIB) on the Ethereum blockchain.
After the collapse of Sam Bankman-Fried’s crypto empire (FTX and Alameda), investor sentiment toward Solana began to decline alarmingly due to his public involvement and heavy investment within the Solana ecosystem. Solana’s token (SOL) downturned by as much as 76% post-FTX collapse. Entire communities built around Solana were wiped out, and the network begged for network activity. Amidst all these, developer activity on the network remained strong, encouraging some SOL faithful to stay the course. Recovery crept in but was laggard. Then came BONK.
What is Bonk Inu?
Bonk Inu launched on December 25th last year as a meme coin but gained traction after it rose 80% in 24 hours and 3600% in a week. After its launch, Tulip Protocol, Solana’s first yield aggregation platform, enabled a BONK-SOL pair. The team behind BONK announced they would offer more than 15,000 non-fungible tokens (NFT) named BONKz on Magic Eden – a Solana-based digital marketplace. That drove speculation, and the BONK price skyrocketed, dragging SOL along. SOL surged above 50% from its bottom.
OMNIcreative, a digital art studio, in collaboration with prominent Solana-based NFT projects, designed the NFTs. Possession of these tokens would represent ownership of fashioned NFTs as “profile pictures” for holders to use on social media networks such as Twitter. The collection brought high-profile artists from the Solana community, including John Le. Worthy to note that the Omni creative studio is also the team behind the popular Fracture and Gods, two of Solana’s most successful NFT projects to date. A portion of the collection was given to holders of the Gods NFT for supporting the project and studio, while more than 8,000 of the supply was left to be minted for only wallets that hold BONK. BONK profile pictures are intended to be art-based with no imminent plans for utility purely. Future governance for the Bonk Inu project will remain with the BONK token, not the NFT, meaning NFT holders don’t get voting rights for the future of the Bonk Inu. Pricing for the mint – a term that refers to the initial issuance of any NFT – was set at $25 worth of BONK, and secondary trading will be transacted with Solana (SOL) tokens. Holders of the Gods NFT collection on Solana were the first to be able to mint the Bonk collectibles, and the Bonk Inu team promised that all BONK tokens raised from this mint would be burned and deleted from existence. Half of the royalties generated from secondary sales following the launch will also be used to buy and burn BONK forever.
Bonk Network Effect
The excitement behind the launch was fever-high, and the eventual mint further pushed BONK’s usage on Solana’s network, attracting massive transaction volume and hype. BONKz broke Magic Eden’s record for the highest number of sales within with first 24 hours following the initial mint on January 10th. Daily active wallets on Solana went over 25,000 active wallets on Jupiter Exchange as compared to 6,500 one month ago. Jito Labs, a company that describes itself as “an MEV infrastructure company building high-performance systems to scale Solana and maximize validator rewards,” ·also announced that they would be launching the first BONK validator and 100% of the validator commission revenue will be donated to the Bonk Inu community to buy back and burn BONK. Bonk fans can commit to Jito’s validator nodes and earn MEV rewards to burn more BONK.
Several markets now exist for the BONK token on centralized exchanges like Huobi, Poloniex, Gate.io, Bitget, BKEX, Hotbit, Jupiter, BitMart, and their Solana-based decentralized counterparts like Raydium, Orca, and Serum.
Although the token’s price has declined by 80% from its peak, the barking of the Bonk project does not seem like fading anytime soon. DeFi Land, a project that creates blockchain games, has hinted at a Bonk-to-Earn game in the works. It is also the largest sponsor in the upcoming Solana community-based hackathon – Sandstorm, and this will help it attract more interest.
Solana communities are coming together to plan a Hackathon – Sandstorm, solely organized by them. A community-powered hackathon does not just show how resilient the ecosystem is but hints at how much user and developer activity is to be expected on the blockchain. Solana Foundation, Helius, Helium, Multicoin Capital, BONK, Phantom, Lamport, Unstoppable Domains, Motley, and Orca are a few of their sponsors.
The price of SOL has plummeted over 93% from its highs. That presents a rare buying opportunity for investors positive on the public image recovery of the blockchain as well its prospects.
Data from Messari show an annual inflation rate of 5.5% for SOL for 2023 from staking rewards, token unlocks, and other factors (31 million new SOL tokens), with 70% of all SOL supply staked. Active wallets rose from 415,000 in December to 610,000 yesterday, while new wallets with tokens experienced an uptick from 173,000 to 510,000. Coin98 Analytics reported a ranking of 4th for Solana amongst all top blockchains for 7-day daily active addresses as the entire industry continues to recover. Fees paid on the network rose 10% week-on-week within the past seven days.
Defillama also reports a 97% year-on-year drop in total value locked (TVL) on the blockchain in December 2022 compared to the prior year. That was caused, to a great extent, by the bear market that ravaged the crypto industry during that time as investors departed the space and several big businesses went belly up. TVL, in SOL terms, declined a modest 47.3%.
Many believe 2023 will be a big year for SOL investors. Moving past the FTX bust and the 2022 bear market, spurred by BONK and other electrifying projects, SOL’s price alongside the blockchain is envisioned to have a massive rebound.
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