Solana-based meme coins have exploded in popularity in recent weeks. Some Solana meme coins have delivered astronomical returns for early investors. Others have endured complete price collapses or, even worse, proven to be outright scams.
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The crypto market as a whole has a reputation for being risky, volatile and speculative. The Solana (SOL) cryptocurrency itself is prone to wild price swings, but Solana meme coins take that risk to another level. Nevertheless, for traders with extreme risk tolerance or market gamblers looking to hit the crypto jackpot, Solana meme coins could be worth a closer look. Here are some things to consider:
— What are Solana meme coins?
— What are the best ways to buy Solana meme coins?
— Is trading Solana meme coins a good idea?
— Alternatives to Solana meme coins.
What Are Solana Meme Coins?
Solana is a blockchain network with an eponymous cryptocurrency that serves as the native token on that network. Launched in 2020, it has rapidly gained popularity in recent years, and its native currency has become the fourth-largest crypto in the world by market cap. Solana users see the blockchain as a superior alternative to the Ethereum network. Like Ethereum, the Solana blockchain supports non-fungible tokens, smart contracts and decentralized apps (dApps). But because of Solana’s unique, hybrid proof-of-history and proof-of-stake verification system, the network processes transactions faster — and far cheaper — than the Ethereum blockchain.
While Solana, Bitcoin (BTC), Ether (ETH) and other cryptos were created to serve a purpose as currencies, stores of value or facilitators of blockchain transactions, meme coins are typically created as internet jokes and empty trading vessels. Meme coins have a reputation for extreme volatility, and they typically do not offer investors any practical use other than a laugh and an opportunity to get rich quick (or the opposite).
As Solana’s popularity as a blockchain has grown, Solana meme coins have begun popping up left and right. In fact, CoinGecko quotes prices of hundreds of Solana meme coins, the vast majority of which have market capitalizations under $5 million and nominal prices per coin of a few cents (many trade for fractions of a cent).
Two more common themes among these Solana meme coins is that many of them are less than one year old and are down 95% or more from their initial launch prices.
Of course, there are several major exceptions. For example, the largest Solana meme coin by market cap is dogwifhat (WIF), at more than $2.5 billion. After reportedly launching in November 2023 with an initial price of $0.000013, WIF’s price has soared to $2.59 today.
Outside of dogwifhat, other top Solana meme coins include Popcat (POPCAT), Bonk (BONK), cat in a dogs world (MEW), Goatseus Maximus (GOAT) and BOOK OF MEME (BOME).
What Are the Best Ways to Buy Solana Meme Coins?
For investors who feel compelled to add dogwifhat or other Solana meme coins to their portfolio, it might prove more difficult than it seems. It’s become fairly straightforward to invest in Bitcoin or Ethereum via centralized cryptocurrency exchanges (CEX) like Coinbase Global Inc. (ticker: COIN) or Binance, or through brokerage platforms like Robinhood Markets Inc. (HOOD). Unfortunately for meme coin investors, these exchanges are very selective in their support for meme coins. Not surprisingly, many Solana meme coins do not make the cut.
Investing in a Solana meme coin that is not available on a major centralized exchange can be complicated and risky. But when a trusted, centralized exchange is not available, investors can turn to a decentralized exchange (DEX).
[See: What’s the Best Cryptocurrency to Buy? 6 Contenders]
To buy a Solana meme coin on a decentralized exchange, the first step is to identify and set up a cryptocurrency wallet that is compatible with Solana; Phantom and SolFlare are two of the most popular.
Next, buy or deposit Solana into the wallet. For most users this means buying SOL through a centralized exchange like Coinbase and then sending those to your Solana wallet’s address.
Your wallet should now be set up and funded with SOL. Keep in mind that it is vital when setting up your wallet to write down your wallet “keys,” which give you access to your wallet and all the crypto and meme coins within it. If you lose these, you lose everything in the wallet, so guard the keys carefully and never reveal them to others.
Once you have a funded crypto wallet with Solana in it, identify and connect the wallet to a trusted DEX that supports Solana’s ecosystem, such as Orca, Raydium and Meteora.
Next, navigate through the platform to identify targeted meme coins. This process will involve finding and confirming the contract address for the Solana meme coins you want to buy, using project websites or other official documents.
Once you have identified and confirmed the correct coin, copy and paste the contract address for the meme coin of choice into the DEX. You’ll be swapping SOL coins for whatever meme coin you desire. The meme coins should appear in the wallet within a few minutes of executing this swap.
It’s extremely important to note there are risks associated with every step of this process. The DEX market is rife with scams, pump-and-dump schemes and deception. For example, different meme coins can have the same name or very similar names. Make sure to double check the token name and contract address. Do not blindly trust any wallet, exchange or crypto project without taking steps to verify its legitimacy. One popular tool for verifying coins is the website RugCheck.xyz, which can identify any potential red flags in a Solana contract address.
Is Trading Solana Meme Coins a Good Idea?
Meme coin trading can be extremely rewarding, fun and lucrative for traders with extreme risk tolerance and the right perspective. But trading Solana meme coins is one of the riskiest things an investor can do with hard-earned money, and it’s probably not right for most people.
Nic Puckrin, CEO of Coin Bureau, does not recommend trading Solana meme coins.
“They are incredibly volatile and most of the early launches are complete scams. Moreover, it’s well known that only those with inside information are the individuals succeeding with meme coins,” Puckrin says.
Joe McCann, founder, CEO and CIO at Asymmetric, says trading Solana meme coins is no different than gambling on a football game.
“Many traders trade meme coins because of the ‘player-versus-player’ (PvP) atmosphere it creates, similar to a video game,” McCann says.
At first glance, trading Solana meme coins may seem no different than investing in Bitcoin, Ethereum or even Solana itself. It may also seem similar to trading stocks or other assets. But stocks represent ownership in an underlying company that has real assets and potential to generate earnings and revenue. Bitcoin, Ethereum and Solana enthusiasts argue that those cryptocurrencies have value as universal digital currencies or means of facilitating blockchain-based transactions. For most meme coins, the primary goal is simply for the creators and early investors to make money off later buyers. There’s no true value or utility underlying the tokens other than them serving as a trading vessel.
“Meme coins are incredibly risky and should be evaluated similar to buying lottery tickets — you are most likely going to lose, but if you win, you win big,” McCann says.
Johnny Gabriele, head of decentralized finance at CryptoOracle, agrees with the gambling analogy.
“Meme coins are gambling, no different from sports betting or going to a casino. Whether or not they are a good idea is a very individual question, but if you are OK with jumping into the crypto casino, it can be a fun way to play around on-chain and make internet friends,” Gabriele says.
Alternatives to Solana Meme Coins
For investors interested in cryptocurrency and Solana in particular, there are far safer ways to get involved than by trading Solana meme coins. Investors can safely buy Solana directly on popular CEXs, such as Coinbase and Gemini. Investors with standard brokerage accounts may be able to purchase exchange-traded fund-like Solana products such as the Grayscale Solana Trust (GSOL), a closed-end fund, and the VanEck Solana ETN (VSOL), an exchange-traded note.
Outside of Solana, cryptocurrency enthusiasts can easily invest in Bitcoin and Ethereum directly via CEXs or digital payment apps like PayPal and Venmo. The U.S. Securities and Exchange Commission has also recently approved Bitcoin and Ethereum spot ETFs that trade on major U.S. exchanges just like stocks. Those funds include the iShares Bitcoin Trust ETF (IBIT) and the Grayscale Ethereum Trust (ETHE).
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How to Buy Solana Meme Coins originally appeared on usnews.com
