Solana (SOL) took the hardest hit as crypto investment products saw modest inflows of only $30 million last week. Ethereum recorded just $4.2 million in inflows, while Bitcoin led with $42 million.
The recent CoinShares report attributes this muted performance to recent macroeconomic data, which suggested the Federal Reserve is unlikely to cut interest rates by 50 basis points (bps) in September.
SOL Suffers Its Largest Outflows on Record
Amid the poor inflows, Solana experienced outflows of $39 million, marking its largest negative number on record. This sharp decline followed the previous week’s inflows of $4.5 million, indicating a notable shift in investor sentiment toward SOL.
According to CoinShares, the record outflows in Solana were accompanied by a sharp decline in trading volumes of SOL-based meme coins. The report suggests that waning demand for these assets played a key role in Solana’s downturn.
“Solana saw outflows of $39 million, the largest on record, as it faced a sharp decline in trading volumes of meme coins, on which it heavily relies,” an excerpt in the report read.
Read more: 11 Top Solana Meme Coins to Watch in August 2024
Indeed, CoinGecko data reveals a 4.4% drop in the market capitalization of Solana meme coins. The top three — Dogwifhat (WIF), Bonk (BONK), and Book of Meme (BOME) — have declined nearly 5% since Monday’s session began.
Dwindling trading volumes for these tokens, coupled with speculation about a potential ETF denial, contribute to the negative trend for SOL flows. Meanwhile, Tron-based tokens have surged following Justin Sun’s announcement of SunPump, a token generator launched by Sun.io, causing trading volumes and revenue metrics for newly created tokens to skyrocket.
Tron Could Steal Solana Meme Coins’ Thunder
Tron’s SunPump enables the creation of meme coins on the Tron blockchain. It has already launched over 5,500 meme coins and generated significant TRX revenue. With this record of success, SunPump positions itself as a direct adversary to Solana‘s popular pump.fun platform. The latter recently recorded a surge in transaction fees to $5.3 million within 24 hours.
As chatter around SunPump continues, there is speculation that Tron meme coins could replace Solana meme coins, with Justin Sun highlighting a massive liquidity pool.
“For me, when it comes to the whole “Why TRON, why SunPumpMeme?” thing, the biggest flex is that $60 billion in TRON USDT. No other blockchain protocol has a liquidity pool this massive. Meme coin platforms live and die by liquidity, and TRON’s got it in spades,” Sun noted.
Undoubtedly, Tether’s USDT stablecoin on TRON boasts a circulation far more massive than any other blockchain protocol. Solana, which currently stands as the most dominant chain on metrics of meme coin activity, only has about $1.9 billion of USDT circulating on it. Conversely, up to $60 billion worth of USDT circulates on the TRON blockchain.
Read more: 7 Hot Meme Coins and Altcoins that are Trending in 2024
Tron and SunPump have committed $10 million to the Meme Ecosystem Boost Incentive Program to reawaken the meme coin narrative by supporting new projects. Despite this initiative, concerns remain due to platforms like pump.fun, which attracted criticism for allowing bad actors to launch meme coins and carry out rug pulls.
Critics argue that these schemes can bypass Tron and SunPump’s “rigorous vetting process,” enabling malicious activities while undermining the credibility of the meme coin ecosystem.
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