Finance

Solana memecoin frenzy draws parallel to Ethereum ICO era

The Solana (SOL) blockchain has become a hub for new memecoins this bull season, with several new memecoins barely a couple of days old racking in billions in market capitalization.

This memecoin frenzy has made many draw comparisons to the Ethereum (ETH) initial coin offering (ICO) era bubble from 2017 when several crypto projects raised millions of dollars, but many failed to deliver.

Memecoins are cryptocurrencies originating from an internet meme or having some other humorous characteristic, but lack any real-world use case other than being a pop culture reference. These cryptocurrencies are highly speculative and supported by some enthusiastic online communities.

Dogecoin (DOGE) is considered the OG memecoin and was supported by Elon Musk during the 2021 bull market. In 2024, multiple memecoins, some barely a week old, have racked in billions in market capitalization, making new crypto millionaires by the hour.

The recent comparison to the ICO pre-sale era from 2017 comes from the fact that many influencers have managed to raise millions of dollars in pre-sale to launch new memecoins.

Users on X compared the current memecoin offerings (MCOs) to the ETH ICO bubble in 2017 when several crypto projects promised to deliver only to vanish after raising funds. A 2018 report indicated that over 90% of the ICO projects failed.

Similarly, there have been several instances where influencers have run away with the pre-sale money or have dumped it on the market right after the launch. In one such instance, a developer that raised 535,000 SOL ($10.4 million) to launch a memecoin accidentally burnt it all.

Developer burns $10 million in Sol. Source: Slerf on X

One user on X noted that the memecoin mania is a more honest version of the 2017 ICO craze and the 2021 NFT/crypto-art bubble as projects “no longer have to pretend to deliver on a fake white paper and investors no longer have to pretend to be in it for the art.”

Scammer defrauding people using memecoin frenzy. Source: ZachXBT on X

Stories of a few traders making millions of dollars in a couple of days often attract several others to try their luck. However, on most occasions, they lose a significant chunk of their investment.

A trader’s memecoin portfolio. Source: Elja on X

Crypto proponents claim the memecoin bubble burst would eventually liquidate millions of new users who are blindly putting their money into technology with no utility

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