QUICK TAKE

• A tweet from “Roaring Kitty” Keith Gill significantly impacted the meme stock community.
• Solana’s revenue was over 60% of Ethereum’s on several days last week.
• Pump.fun, a Solana-based platform, saw a surge in activity and revenue, despite a significant exploit.

Solana’s Ascendance in the Crypto Space

Memecoin enthusiasm saw a renewed surge last week, largely fueled by the return of “Roaring Kitty,” the Reddit user known for sparking the 2021 meme stock frenzy on r/WallStreetBets. Keith Gill, the man behind the account, revived his presence on the social media platform X, marking his first activity since June 2021 with a single, impactful tweet. The tweet, featuring a popular meme indicating imminent action, caused a ripple effect in both the stock and crypto markets.

The immediate impact was most visible in the stock market, where GameStop (GME) and AMC shares experienced heightened volatility, leading to multiple trading halts. GME saw a dramatic spike of over 100% following the tweet before trading was paused. However, the influence extended beyond stocks to the on-chain meme community, particularly on the Solana network.

Solana’s Memecoin Boom

Solana, renowned for its low transaction fees, has become a hub for memecoin enthusiasts. The GME memecoin, although unaffiliated with GameStop, surged by 460% on Solana on Tuesday following Roaring Kitty’s tweet. Unlike traditional stock markets, the crypto market didn’t face trading halts, allowing for uninterrupted trading activity.

One significant factor in Solana’s memecoin ecosystem is the platform pump.fun, which simplifies the process of deploying new tokens. The platform’s revenue peaked at $1.23 million on May 14, the day after Gill’s tweet, as users rushed to create new tokens. This surge was despite an exploit by a former employee who used a flash loan and unauthorized access to steal $1.9 million, leading to a temporary pause in trading.

Solana’s Growing Dominance

Despite the challenges, pump.fun quickly resumed operations, offering free trading in the aftermath of the exploit. This resilience is indicative of Solana’s broader recovery and growing dominance in the crypto space, especially following the collapse of FTX.

While Solana’s memecoin activity has not returned to its March peak, the network still sees significant daily transaction fees, typically around $1 million. This is a substantial increase from the $50,000 daily fees seen in early 2023. In contrast, Ethereum has experienced a decline in block demand, leading to some of the lowest total fees paid on the network in recent times.

This shift has allowed Solana’s fee-to-revenue ratio compared to Ethereum to reach new highs. Last week, Solana’s revenue was over 60% of Ethereum’s on several days, a notable increase from the fractional percentages seen at the end of last year. This underscores Solana’s emerging dominance as a cost-effective and efficient alternative in the post-FTX era.

The Future of Solana

Solana’s ability to maintain high usage and significant revenue despite recent market fluctuations highlights its robustness. The network’s low fees and efficient transaction capabilities make it an attractive option for both developers and traders. As Solana continues to build its reputation, it’s positioning itself as a formidable player in the cryptocurrency market.

The resurgence of memecoin activity, driven by influential figures like Roaring Kitty and supported by platforms like pump.fun, demonstrates the dynamic nature of the crypto market. Solana’s adaptability and resilience in the face of challenges will likely continue to attract users and investors, solidifying its place in the crypto ecosystem.