Low monopoly helps SOL manage risk and stabilize value during periods of market decline.
Solana has reached a major milestone as the largest DEX by volume, with meme tokens leading the buying.
The new trend in SOL memes may further cement their dominance.
Solana (SOL) surged 8% in value at the start of the second week of September, trading at $135 at the time of writing. This surge is likely driven by an increase in major coin holder positions in several meme tokens, supported by the strong memecoin community.
It is worth noting that three major cryptocurrencies have attracted significant attention from major investors. Could this be the key to a potential SOL price surge?
Solana leads the way in DEX volume
Solana recently achieved an impressive feat, surpassing competitors to become the leading blockchain in decentralized exchange volume.
Earlier this year, SOL overtook BNB and Base, and now leads by a staggering 378%, with trading volume at $3.2 million compared to $670,000 for Base. Furthermore, Solana is the only chain with over 1 million DEX traders.
As the chart below shows, memes and low-cap tokens dominated the buying volume, peaking at $2 billion in mid-March. This surge coincided with a bullish rally that pushed SOL above the $200 mark.
Since then, purchase volume has dropped by about 94% to $110 million, but the dominance of these tokens has continued.
In short, memecoins help SOL hedge against Bitcoin volatility, attracting both large and short traders.
Meanwhile, a new trend has emerged: a prominent analyst has highlighted how Solana memecoins are driving the decentralization process for their primary holder.
Simply put, some major meme tokens achieve a more equitable distribution among their holders, with each major holder owning about 0.1% of the total supply. The question is - how does this help SOL?
Reducing monopoly reduces risk.
Despite last week’s decline, Solana’s strong memecoins continue to grow steadily among diamond investors, as seen in the chart below.
With GIGA topping the list with 10.8 million holders, and POPCAT close behind with 10.4 million, the difference in the number of large holders is small, at a meager 3%.
Additionally, the even distribution of large holdings reduces the risk of centralization, preventing disproportionate influence on the token price.
Furthermore, decentralized distribution can attract a wider base of participants, increasing the value of SOL.
As mentioned earlier, memecoins have a significant impact on SOL. Some traders use it as a cheap alternative, while others stick to it with long-term faith.
This is also supported by Solana holders viewing memecoins as long-term investments, with BONK leading the weekly activity followed by WIF.
Whether it's real or not, here's SOL's market cap in terms of Bitcoin value.
Given the volatility of these cryptocurrencies and their strong consumer base, the low monopoly helps SOL mitigate risks during market downturns, especially those caused by BTC volatility.
In general, if bears push the market lower, SOL faces less risk from its memecoin position, as holders of major coins are less inclined to sell, which absorbs volatility.