AI Meme Coins Fuel Solana's Surge: A New Intersection of AI and Cryptocurrency

Solana soars 19% thanks to an AI memecoin frenzy

Solana, the third most popular blockchain, has been on a tear the past few weeks thanks to AI memecoins, a new niche in crypto that blends artificial intelligence and cryptocurrencies derived from internet jokes. The run has sent Sol, the native-token of the Solana blockchain which many memecoins are built on, above $175 for the first time in two months. While the broader crypto market continues to consolidate this week following early October lows, Solana's gains have outpaced those of the largest cryptocurrencies. Sol is outperforming Bitcoin, Ethereum, XRP and others included in the CoinDesk 20 Index. Solana is up 19% over the last seven days while, in contrast, Bitcoin is up 0.8%, and Ethereum and XRP are down 3%. This month's price action from Solana, which touts itself as an alternative to Ethereum's high fees and slow transaction rates, has brought SOL to a new all-time high against Ethereum, with 1 Sol equivalent to 0.07 Ethereum, and the highest price against Bitcoin since August. AI memecoins have captivated the crypto community since Goatseus Maximus, a new memecoin, sparked conversation about the intersection of the two technologies. The frenzy has sent daily active users on the Solana blockchain to a record high of almost 9 million and caused transaction fees on Wednesday to reach a high of $4.5 million, according to DeFiLlama data. Goatseus Maximus, or GOAT, was created on October 10 by an anonymous developer known as Pump.fun and gained massive attention when Marc Andreessen-backed AI bot Truth Terminal endorsed it on X. The token, founded on the AI bot's fixation with goat memes, has reached a market cap of $722 million since its creation two weeks ago and triggered a flurry of new AI-created memecoins. The sector has reached a market cap of over $2 billion, up 24% in the last day, according to CoinGecko. Other Solana-based memecoins are up in the frenzy as well. "Popcat" and "cat in a dogs world" are both up over 20% this week. Another factor in Solana's recent run may be the ongoing rapid expansion of decentralized finance, or DeFi. Solana is up more than 450% this year. Since January, the total value locked on Solana -- the U.S. dollar value of digital assets staked on a blockchain through DeFi -- has almost quadrupled to $6.9 billion.

Why This AI Meme Coin Project Surged 11% This Week

There's a new catalyst forming for Solana, which is up big this week. Layer 1 blockchain network Solana (SOL -3.40%) is many things to many different investors. But over the past week, Solana's token price has absolutely rocketed higher, surging 11.2% since Friday close as I write this. This move led Solana to become the best-performing asset among the top 20 crypto projects this past week, and also resulted in Solana reaching a record high versus competing layer 1 proof-of-stake ecosystem Ethereum (CRYPTO: ETH) this week. There are a number of factors which drove this rally, but it's clear that most investor attention has been paid to the AI meme coin rally we're seeing play out in the crypto sector. Let's dive into what to make of this rally, and whether it could be sustainable moving forward. Developers are building on Solana What's interesting about the rise of AI meme coins is how disproportionately this surge in interest in this niche has benefited Solana. A number of such projects, including Goatseus Maximus (trading under the ticker GOAT), have achieved massive market capitalizations recently as investors look to invest in the latest trend of AI agents pushing meme coins, many of which happen to be developed on Solana. Solana's plethora of meme coins that have seen impressive gains in the past, including Bonk and Dogwifhat, have led many investors toward this particular layer 1 network for speculation. However, with increased investment has come increased network revenue from transaction fees, which broke through the $4 million mark this past week, setting a new record and achieving levels that are around 10 times what they were at September lows. That's a rather dramatic move, and one which investors appear to believe can continue from here. Of course, much of this investing thesis relies on the idea that AI-driven meme coins can continue to surge, and that's up for debate. Is this move sustainable? What's interesting about this week's move in Solana is that there are certainly fundamental metrics investors can use to back up the idea that this project should be worth roughly $8 billion more than it was last week. However, it's also true that the key driver of this week's surge has been meme-coin-related. We've seen how other bubbles have ended, so the question many are asking right now is how far along the hype curve are we on this trend. I'll leave debate of that question to speculators. But one thing that's clear to me is that development activity remains high, transaction-driven fee revenue is also strong, and inflationary pressures are abating for Solana, with around 15% of newly issued tokens being burned, according to data from Blockworks. These factors do suggest to me that this trend could be sustainable, if AI meme coins are eventually replaced with the next new technology, so long as developers continue to choose Solana as the base layer to build upon.

Solana Overtakes Ethereum In Daily Fees, Thanks to AI Meme Coin Craze

The SOL derivatives data also points that the rally will continue further to its all-time high levels. Ethereum Layer-1 competitor Solana (SOL) is making waves with a rapid surge of daily revenue on the platform. As a result, the SOL price has shot up 5.62% as of press time moving all the way to $174 and a market cap of $82 billion. Furthermore, the SOL blockchain is also emerging as the preferred destination for the launch of AI meme coins. As per the latest data from IntoTheBlock, the daily fees on the Solana network have crossed $4.1 million while surpassing the Ethereum daily fees as of now. The major reason behind this massive surge in network fees has been the frenzy surrounding AI meme coins on the Solana blockchain. One of the biggest contributors currently is the Goatseus Maximus (GOAT) token which has surged over 40% hitting its all-time high levels of $0.7009 and its market cap surging past $700 million. The GOAT meme coin has achieved this massive milestone within just two weeks of launch after being promoted by the AI bot 'Truth Terminals'. An anonymous developer created the GOAT token on October 10 on the Pump.Fun platform. In a report on Wednesday, DeFi analyst at K33 Research, David Zimmerman wrote: "A whole narrative was born from the intersection of AI, memecoins, and crypto. AI memecoins have gained massive attention over the last two weeks, with many tokens reaching over $100 million market cap." The Solana price has caught good momentum recently outperforming some of the top cryptocurrencies like BTC, ETH, and others. On the monthly chart, the SOL price has gained a staggering 18% with bulls eyeing a further push to its all-time high levels. Some market analysts believe that the SOL price could be on a path to a parabolic rally to $2,000. As per the Coinglass data, the open interest in Solana has shot by 13.7% moving past $3.4 billion. Also, the derivatives trading volume is up by 25% in the last 24 hours to $9.54 billion. Open interest refers to the unsettled futures bet for the digital asset. It helps to gauge whether new money is entering into the market. Thus, with on-chain metrics showing positive developments, the SOL price rally can continue further ahead.

The Hottest Sectors In Crypto? AI, Memes And One Surprise, Says Veteran Analyst - Emeren Group (NYSE:SOL)

Innovative promotions for AI-driven meme coins are capturing retail attention and adding new excitement to the market. In his Q4 crypto market outlook, pseudonymous cryptocurrency influencer The DeFi Edge outlined emerging trends and potential investor opportunities, suggesting a renewed optimism in the crypto industry. What Happened: DeFi Edge on Friday highlighted several drivers for the market, including the upcoming U.S. presidential election, promising on-chain metrics for platforms like Base and Solana SOL/USD, and a rise in AI-powered meme coins. "Now's the time to shake off the bear market PTSD and lock in," he asserts, noting increased engagement in the space. Solana is seeing a revival, with daily token creation averaging over 96,000 in Q4, fueled by the popularity of meme coins and AI tokens. AI x Meme Coins The trader also focuses on the growing interest in AI-driven meme coins, with Goatseus Maximus GOAT/USD at the forefront. "Truth Terminal went all-in on promoting GOAT on X. People loved it," notes the author, drawing comparisons to the excitement around NFTs in 2021. DeFi 1.0 Giants DeFi Edge also discusses legacy players like Fantom, now rebranded as Sonic Chain, Aerodrome's rising influence on Base, and Aave's AAVE/USD plan to expand its GHO stablecoin to ecosystems like Base and Avalanche AVAX/USD. Giants like Aave and Uniswap UNI/USD show potential for renewed relevance. What's Next: While mindful of the risks, DeFi Edge takes an optimistic view on Q4, with "green candles" and "major tailwinds" ahead. Still, the trader underscores the need for active, strategic investing to make the most of these trends. Read Next: Bitcoin To Hit $73K On Election Day And $80K If Trump Wins, Says Standard Chartered Image: Shutterstock Market News and Data brought to you by Benzinga APIs