The cryptocurrency market has seen remarkable growth with Bitcoin spearheading significant advancements. Since early April, over a million new tokens have emerged, with Ethereum and Solana networks being major contributors. Ethereum has seen the creation of more than 370,000 new tokens, while Solana has witnessed over 640,000 new tokens, predominantly memecoins.
Why Are Memecoins Gaining Popularity?
Since April 1, a significant number of new tokens have been launched on the Ethereum network, with 372,642 tokens created, 88% of which are on the Base Layer-2 network supported by Coinbase. The low-cost structure of the Layer-2 network has attracted many enthusiasts to support new memecoin projects.
Coinbase director Conor Grogan highlighted that this creation rate is double what was seen on Ethereum from 2015 to 2023. Data from L2beat reveals that the total value locked (TVL) on Base has surged by about 630% in 2024 due to the hype around memecoins. Solana has also been active, with 643,227 new tokens created in the same timeframe.
What Are the Concerns?
Dune Analytics shows that 466,914 of the new tokens on Solana’s Pump fun platform are memecoins. CoinMarketCap has also listed the newest 500 tokens in the last 30 days, with the majority being memecoins.
Crypto analysis platform CoinGecko now has a memecoin category listing over 600 tokens valued at $52.7 billion, nearly half of Tether’s market value. Grogan’s announcement elicited mixed reactions from the crypto community, with some considering memecoin projects detrimental to the core values of cryptocurrency.
Key Insights for Investors
- Ethereum and Solana are leading networks for new token creation.
- Base Layer-2 network is a hotspot for launching new memecoins due to low costs.
- Total value locked (TVL) on Base has seen a significant increase.
- New tokens on Solana and Ethereum are predominantly memecoins.
- Investors should be cautious as a significant portion of new memecoins may have vulnerabilities or be scams.
The surge in new token creation, especially memecoins, has led to debates within the crypto community. While some see it as a sign of growth and innovation, others warn of potential risks and the dilution of core crypto values.