Time is a flat circle. Nothing exemplifies this Nietzschean idea quite like the crypto space. For the last two years, we’ve seen a seemingly-endless revolving door of speculative meme projects come and go. They show up, investors go crazy for it, the early investors who made massive gains sell, and then they go down. Many had seen these investments as a by-product of the bull market of 2020 and 2021. But we’re now in the midst of the biggest crypto winter in years, and a meme project Bonk (BONK-USD) is seeing jaw-dropping gains still. So, what’s the Bonk crypto, and how’s it carrying on the meme coin frenzy through such a poor time for the market?
Projects like Shiba Inu (SHIB-USD) and its many spin-offs helped to kick-start a Shiba Inu-branded obsession with speculative “deflationary” crypto investments. Dozens of dog-themed tokens with total supplies in the trillions came afterward, promising much of the same. Bonk is a continuation of this trend, and it’s aiding its parent network, Solana (SOL-USD), which is going through perhaps one of its rockiest periods yet.
The Bonk project, much like its meme-coin peers keeps things short and sweet in terms of what it hopes to accomplish. Essentially, the developers created the token in order to drum up hype for the Solana community. Of the 100 trillion BONK total supply, 50% of these tokens have been airdropped to investors. This “free money” is then drawing masses of curious investors toward it.
This airdrop first occurred in late December, and after just one week, the gains have been spectacular for recipients. Prices rising from $0.00000000093 to a high of $0.0000046 may not seem spectacular at first glance. But, it’s a gain of over 4,800% for week-long holders. The jumpstart meme coin carries an astonishing market capitalization of $86 million as a result.
Bonk Crypto Provides Lifeline to Limping Solana Network
As with all other meme coins, the Bonk crypto’s success will likely be short. Already, the token is down 63% from its all-time high. Profit takers seem to be jumping ship rapidly, with almost $86 million in BONK trading hands in the last day. But while the project’s hype will eventually, it’s righting the path for a struggling layer-1 network.
Solana has been kicked down in recent months. This is not only because of bearish market factors but also because of its association with FTX (FTT-USD). Indeed, FTX and sibling company Alameda Research had been holding over $1 billion in SOL on its balance sheet at the time of its collapse. Moreover, as an early investor in the Solana project, developers are having a hard time breaking their association with FTX founder Sam Bankman-Fried.
Already down-trodden by the crypto winter, the FTX revelation caused the SOL coin to plummet from $36 to a low of $9. Moreover, the network has seen its most prominent non-fungible token (NFT) creators leaving to build on other networks.
BONK has helped Solana greatly in the last few days by encouraging swarms of participation on the layer-1. The token has been providing yields of 1,000% to liquidity providers, incentivizing new providers to step in and attempt to farm gains. It’s also encouraging NFT creators to come to Solana as well by using BONK airdrop incentives.
The BONK hype has driven SOL prices up 37% in the last week. This is making for Solana’s largest upward momentum in months. Still, there are hang-ups worth mentioning, like BONK’s high concentration of wealth among insiders. Indeed, the almost two-dozen BONK insiders hold 20% of the total supply, per BONK’s whitepaper. This raises questions about just how decentralized the project can assert itself to be, even with developers holding only 5% of the supply.
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On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.