Solana Summer 2.0
Will DeFi be able to save our $SOL?
December 2022 was brutal for the Solana community. My beloved blockchain had taken a beating for the entirety of Q4, and in the final month of the year, there was no respite in sight.
Price action looked grim: in one particularly dark November week filled with crypto-doomsday headlines, $SOL lost two-thirds of its dollar value.
It appeared the once vibrant community was buckling under the weight of recurring losses. There was the Aptos bubble that stole the spotlight from Solana NFTs, mostly fueled by a token airdrop, but that predictably turned out to be nothing more than a flash in the pan.
Project founders were capitulating left and right in search of greener pastures. It was scandalous. The #1-ranked Solana NFT project even got poached by Polygon Network for a sum of $3 million.
It seemed like the party was winding down as the DJ prepared to pack up the deck. Through all of this, the founders of Solana somehow stayed focused on shipping improvements to their product.
Enter, Bonk Inu.
Twitter usually feeds me a mirror of my interests because I strive to follow high-value people. So it was weird when I saw my mutuals posting about some shitcoin called $BONK for like five days in a row.
Still, I paid no attention to it until about 269 million coins landed in my wallet one day in January. I had been airdropped for being a holder of the premier music NFT project on Solana. Free money, out of thin air!
I went to sleep, and the next day, the dollar value of my dog shekels had tripled. My brain nearly exploded as I finally understood the social media hype. Other airdrop Santas (such as Aptos) had missed a brilliant social engineering play that the team had hacked.
Social engineering has always been part of the magic of blockchain.
Here are three important lessons for businesses looking to tap into the blockchain market:
ORGANIC OUTREACH
A huge chunk of the token supply was airdropped to holders of specific Solana NFTs. This resulted in a huge discount on marketing by activating organic outreach through peer-to-peer interactions on Twitter. It didn’t matter how small your social niche was—you would hear about $BONK.
The team recognized that the Solana ecosystem's greatest strength was its community and technology. These factors helped them launch the most successful Solana DeFi token in recent memory.
MARKET RESEARCH
They accurately identified their target demographic. Users who had interacted with Solana NFTs for about a year would be more likely to interact with liquidity pools.
Paired with the sentimentality of an exclusive gift, their free product targeted at a specific subset of users tapped into the heart of Solana's community culture. The result was the hype that seeped into every corner of crypto-Twitter within two weeks.
TARGETED COLLABORATION
The earliest tweets from the Bonk Inu team made their intentions clear: they wanted to work with established builders in the Solana ecosystem. The team was also not afraid to mention their dream partners either.
This tactic of open courtship earned them the favor of community members who felt a sense of belonging to a special club. It also prompted “outsiders” to court them in hopes of attaining a similar status.
Besides the ripple effect of inbound lead generation, this approach was instrumental in helping $BONK gain some legitimacy as more than a random Ponzi meme coin. There’s a growing list of dApps and NFT projects that have integrated the token, helping to grow its user base rapidly.
January is still young, and so is $BONK. However, the market cap keeps growing. This meme token spurred a spike in transaction volume on the Solana blockchain. It even jumpstarted the sputtering engine of the $SOL rocket, helping its parent coin climb back to a double-digit dollar value.
Individuals and blockchain teams burn it for cultural appreciation and practical purposes, strengthening its macroeconomics. However, like all successful things on the blockchain, it has lots of copycats.
$BONKMAX, $BBONK, $SHIBONK, and $FRONK (no, I’m not making these up, I promise) all launched within days of one another.
Each one sounds more ridiculous than the last, but even worse, they mindlessly try to replicate the success of $BONK without getting creative in their use of its playbook. Besides being obvious cash grabs, these shitcoins prey on the FOMO of those who missed the first train.
Degen season is in full swing in Solana, and the jury is still out on what the effects will be. Two things are certain, though.
Firstly, people will lose a lot of money. Greed and an inability to do due diligence will result in financial woe. Inevitably, someone will be left holding the hot potato. I sincerely hope that it won’t be you.
Secondly, Solana DeFi platforms will see an uptick in activity. Perhaps this will entice more venture capitalist investment in the sector.
It is likely that new products will emerge, building on the cost-effective infrastructure of Solana to deliver better experiences and a wider range of options for users.
Nitro Labs is a company that is working to build the first Solana Virtual Machine. Their success would mark a watershed moment in the history of the blockchain, making it a truly scalable Layer 1 protocol. The possibilities are exciting to theorize, but the timing of events is delightful.
In conclusion, none of this is financial advice. Being better informed than you were ten minutes ago should help you make smarter investment choices, though.
I simply urge you, whether you are a retail investor, a product builder, or a seed investor, to think long-term. We are a long way from where we have the potential to be.
