Is Solana’s Meme Frenzy Equal to Ethereum’s ICO Era?

Solana has become the epicenter of new memecoins in this bull run, with several new memecoins reaching multi-billion dollar market caps just days after their launch.

The memecoin craze has been compared to the Ethereum initial coin offering (ICO)-era bubble from 2017, when several crypto projects raised millions of dollars but many failed to deliver.

Memecoins are cryptocurrencies that are derived from internet memes or have other humorous features, but lack any real-world use cases other than being a pop culture reference. These cryptocurrencies are highly speculative and supported by a few passionate online communities.

Dogecoin is considered an old-line memecoin and was backed by Elon Musk during the bull run of 2021. By 2024, multiple memecoins (some of which were launched less than a week ago) have reached market capitalizations of billions of dollars, creating new crypto millionaires every hour.

The most recent comparison to the 2017 ICO pre-sale era comes from the fact that many influencers have successfully raised millions of dollars through pre-sales to launch new memecoins.

Users on X compared the current Memecoin offering (MCO) to the ETH ICO bubble in 2017. At that time, several crypto projects promised to deliver but disappeared after raising funds. A 2018 report showed that more than 90% of ICO projects failed.

Likewise, there have been cases of influencers running off with pre-sale funds or dumping them on the market immediately after a product launch. In one such example, a developer raised 535,000 SOL ($10.4 million) to launch a memecoin, only to accidentally burn it all.

Developers burned through $10 million on Sol. Source: Slerf on X

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

Scammers are using memecoin to scam people like crazy. Source: ZachXBT on X

Stories of traders making millions of dollars in a few days often attract other traders to try their luck.

However, in most cases, they lose a significant portion of their investment, such as this investor:

He traded 11 Solana memecoins in 3 days hoping to make a lot of money. He ended up selling all 11 tokens at a loss, losing a total of 754 SOL ($152,000). The worst part is that he didn’t lose USDT but SOL, which could be worth more in the future.

This trader's memecoin portfolio. Source: Elja on X

Cryptocurrency proponents claim that the bursting of the memecoin bubble will eventually liquidate millions of new users who blindly invested money in a technology that has no utility.