Solana in free fall: Memecoin casino implodes

Who would have thought that the very president of Argentina would be the one to bring down Solana's multi-billion digital memecoin casino? After LIBRA's disastrous launch, more and more illegal practices are coming to light, which many experts have long suspected: systematic fraud on Solana's shady exchanges, full of animal and political coins.

Evidence of this has now been found at the highest level, involving coins such as TRUMP, MELANIA and most recently LIBRA. This is probably just the tip of the iceberg. The result? Solana's value dropped more than 10% in one day, and trading volume on decentralized exchanges such as Raydium plummeted almost 50%. Premier leaders are pulling out, even presidents like Javier Milei are being publicly pressured because of their connections.

Solana has endured an existential crisis before in 2022 with FTX and came back stronger than ever. How dangerous could this scandal be for blockchain? Might this even be a good time to get in?

The implosion of memecoins

Currently, memecoins are imploding on Solana. Insider trading is coming to light, and complex fraud practices dating back to the launch of the TRUMP-Coin are being revealed. All this points to the end of an important pillar for Solana.

The trading ratio between short positions (betting on falling prices) and long positions on Binance is 4:1. "The market is furious with Solana," said Bitcoin trader and influencer Tyler Durden, named after the famous character from "Fight Club."

Everything Is Red

The correction is severe: nearly 10% loss in the currency's value in one day, nearly 40% over the month. Far from the all-time high that Solana reached a month ago. On Raydium, the chain's largest decentralized exchange, trading volume fell more than 40% at times. Adding to the drama is an upcoming token unlock on March 1 at Solana. About 11.2 million new SOL - 2.3% of the total circulating volume - will flood the market.

The Confessions of an Insider

Hayden Davis, involved with the coins LIBRA and MELANIA, which were briefly backed by Argentine President Javier Milei, shares his story. Both coins surged before crashing by more than 90%. Bubblemaps revealed that the same teams were also behind other memecoins. Davis was not involved in the launch of the Trump-Coin, but shares that insiders were able to buy it for a valuation of 500 million during a private dinner in Washington. According to DeFiLama, insiders have made between $3.6 billion and $6.6 billion from Solana memecoins.

The Danger to Solana

Much of the on-chain activity, sometimes up to 70%, came from this sector. Memecoins have been a major driver of revenue, activity and hype. Now a very turbulent period is looming for this sector, if not a total crash. Evidence of how influencer Dave Portnoy shamelessly defrauded his own community has surfaced and is also on-chain.

All this could be the beginning of serious damage to Solana's reputation. Yet Solana's developers remain confident. One of the chain's main developers, Mert, recently said on X: "I don't care about Memecoins. Solana is great because it is the place where people come to build useful crypto applications."

Solana's future depends on its ability to move beyond the memecoin noise and deliver real, usable technology. The major update project Firedancer promises to make blockchain more secure and faster, and a possible Solana spot ETF later this year could further drive adoption. Whatever happens, the next few months will be crucial to the survival and evolution of Solana.