Solana, the third most popular blockchain, has been underperforming in recent weeks due to AI meme coins, a new niche of cryptocurrencies that fuse artificial intelligence and cryptocurrencies derived from internet jokes. This run pushed Sol, the native token of the Solana blockchain on which many meme coins are built, above $175 for the first time in two months.
Solana's gains have outpaced those of the biggest cryptocurrencies this week, as the broader crypto market remains strong following early October lows. Sol has outperformed Bitcoin, Ethereum, XRP, and others in the CoinDesk 20 index. Over the past seven days, Solana has risen 19%, while in contrast Bitcoin has risen 0.8% and Ethereum and XRP have fallen 3%.
This month's price action on Solana, which touts itself as an alternative to Ethereum's high fees and slow transaction rates, has pushed SOL to new all-time highs versus Ethereum, with 1 Sol being equivalent to 0.07 Ethereum and falling versus Bitcoin. is the highest value since then. August.
AI meme coins have captivated the cryptocurrency community ever since the new meme coin Goatseus Maximus sparked conversation about the intersection of the two technologies. The frenzy has pushed the number of daily active users on the Solana blockchain to an all-time high of nearly 9 million, and transaction fees hit a record $4.5 million on Wednesday, according to data from DeFiLlama.
Goatseus Maximus (GOAT) was created on October 10th by an anonymous developer known as Pump.fun and gained a lot of attention after it was endorsed in X by the Marc Andreessen-backed AI bot Truth Terminal.
The token, founded on AI bots' obsession with goat memes, has reached a market cap of $722 million since its creation two weeks ago, sparking a surge in new AI-created meme coins.
According to CoinGecko, the sector is up 24% in the past day, reaching a market cap of more than $2 billion. Other Solana-based meme coins are experiencing similar frenzy. This week, “Pop Cat'' and “Cats of the Dog World'' both rose more than 20%.
Another factor in Solana's recent rise may be the continued rapid expansion of decentralized finance (DeFi).
Solana is up more than 450% this year. Since January, the total amount locked in Solana (the US dollar equivalent of digital assets staked on blockchains through DeFi) has nearly quadrupled to $6.9 billion.
