In recent days, the price of Solana has begun to soar and even doubled for many as it went from $8 to $16 at the end of December into January; but the question still remains, what is causing the troubled network to surge in price by so much?

Bonk Rise

The easy answer to this question is due to $Bonk, which is the latest memecoin to gain notoriety within cryptocurrency communities because of its sudden rise. The coin has basic utilities that don’t offer much value to holders besides “serv[ing] as the community coin” which is not a utility nor a unique goal for the project.

Instead, the new cryptocurrency is capitalizing on the bizarre trend of memecoins like Dogecoin and Shiba which carry all of their value in hype and excitement at the prospect of becoming wealthy in an instant. This has been the major catalyst for many networks and it is no different for Solana because $Bonk resides on the Solana blockchain. 

Bonk Crash

To no one’s surprise, the price of $Bonk fell drastically since its sudden rise that created so many new whales. However, that doesn’t tell the full story about Solana. Regardless of $Bonk’s potential as a major cryptocurrency, many of the holders needed to buy Sol tokens before they could swap it for $Bonk. 

This caused a major jump in liquidity for Solana which has doubled its price and caused it to move back up towards the top 10 cryptocurrencies at #11 (just behind Polygon) according to Coinmarketcap. However, the network is far from recovery and there are still many major obstacles in the way before it returns back to the highs we saw in 2021, unlike Ethereum, Bitcoin, and Polygon. 

Saber Labs probe

According to a recent article by CoinDesk, the team behind Saber Labs (an exchange for stablecoins on the Solana network) was manipulating the price of Sol by transferring coins back and forth between a web of wallets that created false metrics. 

This has led to the U.S. Department of Justice probing the team. The team had already been under scrutiny over the summer and tried fleeing to the Aptos network with Saber Labs. Since then, Ian and Dylan Macalinao, the two brothers leading the team, have started to ignore their communities on Discord. 

Where does Solana go?

Despite the success of $Bonk, the current situation on Solana is cause for concern. One silly memecoin isn’t enough to carry an entire network that was largely supported by FTX; and Frank’s exodus from the network is not helping the situation either. 

DeGods and y00ts were some of the strongest collections on Solana, responsible for massive communities to grow around them that rivaled many popular projects on Ethereum. Now, with their presence gone, it’ll be an uphill battle to remain relevant. 

The network can’t afford to continue losing development teams. The network was already struggling to stay operational at its peak and things could become a lot worse until a legitimate project can revive the blockchain.