Traders are piling into BONK, driving up its price by triple digits in the last 24 hours and potentially indicating a trend reversal in Solana price.
Bonk, a meme token modeled after Shiba Inu that debuted on December 25, has skyrocketed in popularity, and some traders believe the token’s trading volume is potentially driving up the price of Solana. According to CoinMarketCap data, the price of SOL has increased by 34% in the last 48 hours, while the price of Bonk has increased by 117% in the last 24 hours. While the crypto market as a whole remains suppressed, traders are hoping that Bonk will present new opportunities during the downturn.
Bonk is the first dog token on the Solana blockchain, according to the project’s website. To begin, 50% of the token supply was airdropped to Solana users with the goal of eliminating toxic Alameda-styled token economics. According to the Solana decentralized exchange Orca, the airdrop resulted in more than $20 million in trading volume.
Liquidity providers (LPs) stand to benefit from working with Bonk, and as of January 4, LPs are earning over 999% APR, which is significantly higher than the popular SOL/USD Coin pairing.
While high yields do not always remain high, current rates indicate strong market demand for Bonk. In addition to increasing demand, Bonk burned $1 billion in supply on January 3.
Solana blockchains benefit from increased usage. Solana witnessed multiple projects leave the ecosystem following the demise of FTX. Solana saw an 18.6% increase in 24-hour fees and a 15.8% increase in 24-hour daily active users on January 4.
In addition to fee and daily active user increases, the SOL price surpassed $14 for the first time since December 14 on January 4. Some cryptocurrency market participants attribute Bonk’s rise to Solana’s price action.
While Bonk is merely a meme token, its rising popularity is a good sign for the Solana blockchain. This is a sign that Vitalik Buterin’s wish for Solana to have a “chance to thrive” may come true.