The Bonk token, a meme token inspired by Shiba Inu, has experienced a meteoric rise in recent days as traders look for high yield opportunities in the Solana SOL -1.63% ecosystem. Over the past 48 hours, the price of SOL, the native token of the Solana blockchain, has gained 34%, while Bonk has climbed 117% in the past 24 hours, according to CoinMarketCap.
While the wider cryptocurrency market remains sluggish, some traders are hoping that Bonk could present new opportunities during the downturn. The token, which launched on December 25th, is the first dog token on the Solana blockchain. According to the project’s website, 50% of the token supply was airdropped to Solana users with the goal of removing toxic Alameda-styled token economics. The airdrop reportedly resulted in over $20 million in trading volume on the Solana decentralized exchange Orca.
Bonk has proven particularly appealing to liquidity providers (LPs), who stand to benefit from interacting with the token. On January 4th, LPs were earning over 999% APR on Bonk, significantly higher than the popular SOL/USDC pairing. While high yields can be volatile, the current rates suggest strong market demand for Bonk. The token also burned 1 billion of its supply on January 3rd.
The popularity of Bonk has had a positive impact on the Solana ecosystem as well. After the collapse of FTX, a number of projects migrated away from Solana. However, on January 4th, the blockchain saw an 18.6% increase in 24-hour fees and a 15.8% increase in daily active users.
Overall, the strong performance of Bonk and the accompanying increase in usage of the Solana blockchain suggest that traders are eager to find high yield opportunities in the current market. It remains to be seen if Bonk’s momentum can be sustained, but for now, the token is attracting significant attention in the cryptocurrency space.
