Solana Chain Launches Almost 500,000 Token Varieties in May: What Makes It Stand Out?

The number of new tokens on Solana has reached a monthly record high, surpassing any other blockchain network to date. This is largely attributed to the success of certain memecoins and the ability for anyone to launch tokens within seconds. Due to the low entry barrier and the desire to create popular memecoins, creators launched nearly 500,000 tokens on the Solana blockchain in May. According to data compiled by The Block Pro, Solana created 455,000 tokens in May, compared to Ethereum Layer 2’s 177,000 tokens and Binance Chain’s 39,000 tokens. Ethereum mainnet and Layer 2 networks Arbitrum and Optimism created less than 20,000 tokens each. The rise in large-scale token creation on Solana is a downstream effect of its characteristics as a general-purpose Layer 1 protocol with fast settlement speed, high throughput, and low transaction fees. The majority of tokens on Solana are memecoins, attracting the attention of the cryptocurrency community. This trend emerged after certain Solana-based memecoins (such as Dogwifhat, Bonk, and Book of Meme) quickly rose in the cryptocurrency market rankings. The success can be partly attributed to Pump.fun, a website that allows anyone to create tokens with a few clicks. By making token issuance more accessible, it has stimulated the creation of more tokens in the past few months, resulting in 1.1 million new tokens on Solana so far this year. “The frenzy of memecoins and the success of Pump.Fun have made Solana the leading blockchain for new token issuance,” said Steven Zheng, Head of Research at The Block Pro. “Whether Solana can establish itself in token issuance beyond memecoins remains to be seen.” Recently, celebrities such as Caitlyn Jenner and Iggy Azalea have launched Solana-based tokens, leveraging the advantage of a large audience for potential appreciation. Political memecoins have also gained traction on Solana, particularly in the lead-up to the upcoming US election. Last week, there was a surge in the number of political memecoins after Trump was convicted of 34 counts of forgery of commercial records. Solana must surpass Base network, which has been very active in recent months, to lead in the number of newly created tokens in May. In April, Base had 240,000 new tokens, while Solana had only 229,000. Both networks have taken the throne from Binance Chain, which used to be the preferred network for token issuance. Binance Chain averaged 95,000 tokens issued per month in 2021 and 2022. However, these numbers have gradually declined since reaching a peak in May 2021. Overall, a total of 7 million tokens have been issued on the six blockchain networks since 2017. Binance Chain leads with 3.7 million tokens, followed by Solana with 1.4 million tokens, and Ethereum mainnet with just under 1 million tokens. The number of newly created tokens is just one indicator of the cryptocurrency ecosystem. It reflects cheaper and higher throughput chains but does not consider the value accumulation of each token. It is also a vanity metric as most tokens lack liquidity and will be quickly forgotten. However, it does indicate where activity is happening on blockchain networks. As blockchain networks continue to compete to become faster and cheaper, there is no reason to believe this trend will slow down anytime soon.