Original title: Memecoin craze fuels Solana price rally — Is $180 SOL the next stop?

Original author: MARCEL PECHMAN

Compiled by: Lawrence, Mars Finance

A sharp rise in Solana network activity and outperformance among memecoins pushed SOL up to $180.

Solana’s native token, SOL, rose 12.1% from Oct. 11 to Oct. 18, and data shows that the upward momentum was driven in part by demand for the memecoin. Increased demand means more network capacity, fees, and total locked value (TVL).

Traders are currently debating whether the memecoin craze is sustainable and how the price of SOL can continue to benefit from the surge in network activity.

While there is no fundamental reason for the surge in demand for memecoins, influential social media accounts are clearly directing traders’ attention to the tokens. Take this post from pwnlord69 on October 12, for example.

Memecoin Goatseus Maximus (GOAT) surged to a $400 million market cap in a week, fueled by rumors of an upcoming AI-powered bot. In reality, the bot was simply promoting the GOAT token, which was launched using Pump.fun, a decentralized application that manages the technical aspects and liquidity provision of Raydium exchange Solana tokens.

Several other memecoins on the Solana network have seen significant price increases in October, with SPX6900 (SPX) up 379%, Apu Apustaja (APU) up 170%, and FWOG up 134%. PUPS and MAGA (TRUMP) have also recorded significant gains of more than 90%, according to Cryptorank.io. As these memecoins rise in value, they attract more attention from social networks and the media, creating a positive feedback loop.

Solana Network Activity Supports Higher SOL Prices

However, the key question is whether this move will have a significant impact on the price of SOL and how the network performs compared to its competitors. A key metric for this analysis is the total value locked (TVL), which measures the total funds deposited into the network’s smart contracts.

Solana’s total deposits recently surged to a two-year high of nearly 41 million SOL, up 13% month-over-month. In contrast, Ethereum’s TVL remained stable at 17.7 million ETH, while BNB Chain’s TVL also stagnated at 7.9 million BNB. Highlights on the Solana network include Raydium (a 70% increase in deposits over the past 30 days) and Sanctum (a 32% increase in TVL).

Measuring deposits is important, but to truly measure demand for SOL, on-chain activity must be analyzed. For example, decentralized exchanges (DEXs) can record high trading volumes without necessarily having significant TVL. In this context, Solana’s impressive network activity has recently solidified its lead, surpassing Ethereum in the past week.

Solana’s DEX volume grew 43% week-over-week, standing out from its direct competitors. Notably, even Ethereum’s Layer 2 solutions, which benefit from lower transaction fees, cannot match Solana’s performance. For example, Arbitrum’s weekly volume of $3.74 billion is still 64% lower than Solana’s $11.16 billion.

While it’s difficult to predict whether memecoin’s surge will continue, data suggests that a SOL of $180 is plausible given the competitive advantage afforded by the network’s high validator capacity. Ultimately, Solana appears well-positioned to grow in areas such as AI infrastructure, Web3 applications, gaming, prediction markets, and more.