Commentary by Stuart Colley — a crypto learner
On 29th December 2022, the contract DezXAZ8z7PnrnRJjz3wXBoRgixCa6xjnB7YaB1pPB263 went live on the Solana Blockchain for trading. What is $BONK, this dog-faced meme token that overtook the crypto news this past week, and what can be expected from this crypto?
The beginning of $BONK
The contract for Bonk went live on 29th December 2022 and was met with a massive influx of interest from traders. Anyone who has created a crypto project knows it can be difficult to get awareness, let alone have the entire crypto space looking your way in just a matter of days. Airdrops (sending tokens to a crypto wallet at no cost) have always been a way of capturing immediate attention, very popular in the Web3 sphere; and when the Bonk founders (whose identity remains unknown) airdropped 50% of its current supply (approximately 50,000,000,000,000 out of 100,000,000,000,000 tokens) to OpenBook traders, artists, collectors, developers and holders of 40 Solana NFT projects, chances were something was going to stick.
This happened after a couple of months where Solana (the blockchain that $BONK operates on) struggled, following the fall of the centralized exchange FTX. Indeed, a large portion of liquidity on Solana used to be provided by Serum (a decentralised exchange or DEX created by Sam Bankman-Fried, the founder and ex-CEO of FTX). So when FTX went down, the whole Solana ecosystem, among many other crypto entities, took a hit. Many see the $BONK craze as being a saving grace for Solana, bringing alienated investors back to the chain. It is estimated that liquidity providers for $BONK were earning 1% PER HOUR for staking in the liquidity pool, albeit LP staking comes with its own risks.
The Project and Its Use Case
Bonk came to market as a meme token inspired from the Shiba Inu dogm and similar to well-known tokens such as Shiba Inu ($SHIB), Floki Inu ($FLOKI) and Dogecoin ($DOGE); but it was the first of this kind on the Solana Blockchain. Unfortunately like other memecoins, there is no actual utility nor use case – for the time being. The whitepaper (“Bonkpaper” as it’s named) states that “Bonk strives to become the true community coin of Solana to be used far and wide across the many great dApps of this flourishing ecosystem”.
So it is clearly mentioned that the team is looking to create a use case for $BONK to set deep within the Solana ecosystem. As yet though, none of this has taken place. No roadmap nor strategic revenue stream seems to be planned, which is common for meme tokens and contributes to making their fundamentals rather weak. But then we are just over a week in!
The Bonk Community
Like many hyped meme coins, Bonk has a very large and active following, as its reach through news and social media has traveled fast; although this activity is restricted to Twitter. The official Bonk Twitter is nearing 100k followers at time of writing.
The Token & Market Performance
The initial performance of $BONK was formidable, originally listing at $0.000000125 and hitting its current All Time High of $0.00000439 on 5th January. Currently (at the time of writing) Bonk sits at $0.00000182 with a Market Cap of $104m.
While the early backers are subjected to a 3 year vesting period, there seems to be no vesting for the team tokens, and new tokens could be minted at any time, which would greatly compromise its price.
While Bonk seems like a lot of fun, it is likely that a number of investors who FOMOed in have lost out as the meme coin has dropped significantly in value after the initial pump. A strong community is backing the token, so there is a possibility that we are going to see it around for some time to come, despite fundamentals that seem rather weak. Also expect to see a number of copycat meme coins hoping to replicate the short term success of $BONK.
Will $BONK become all that it aspires to? Only time will tell…
Disclaimer: This is not financial advice, but the opinion of our commentator. Crypto is a risky and volatile asset. BONK is meme coin that has only very recently appeared in the crypto space; the team behind this cryptocurrency is unknown. Any action taking part in trading $BONK is extremely risky, and should be performed at your own risk. Kryptview cannot be held responsible for any decisions you make. Do your own research.
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