The BONK token has experienced a 15% dip in price in the last 24 hours. This price crash comes a few days after the Bonk and Solana ecosystem hype. Bonk is a new dog-themed meme coin created to revive the Solana ecosystem, improve liquidity and give retail investors a fair shot at owning a stake in the ecosystem.
The BONK token reached an all-time high of $0.0000049 on the 5th of January before dumping to $0.0000023 within a few hours. Bonk seemed to regain slight bullish momentum the next day but could not reach its ATH. Subsequently, BONK’s price crashed by 40% on the 11th of January and, more recently, by 15% on the 18th of January.
Dexlabs created the Bonk token, and the team has been developing the project in the last few months. However, the Bonk team unveiled the token on the 25th of December, 2022. Its goal was to increase liquidity and attract more builders to the Solana ecosystem.
The Downfall of the Solana Ecosystem
The SOL token was recently caught up in the FTX and Alameda scandal. SOL and FTT tokens were part of the collaterals owned by Alameda Research before the company went bust.
Alameda quickly liquidated most of its SOL and FTT reserves to prevent its downfall. Sadly, Alameda’s actions to salvage the company proved futile. The massive liquidation sent the price of SOL down as “FUD” spread in the crypto ecosystem.
Following the negativities in the Solana ecosystem, several investors lost faith in the project, and SOL’s price continued to tank. Big NFT projects like DeGods & y00ts migrated from the Solana ecosystem to add salt to the injury. This reduced SOL’s trading volume and liquidity. As SOL seemed to be heading further down, the “BONKERS” threw a lifeline.
BONK to the Rescue
Faithful SOL holders owe a lot of thanks to the creators of BONK. The BONK developers launched the meme coin to bring back deep liquidity to Solana’s DEXs. Admittedly, this goal has been achieved as the Solana ecosystem’s trading volume skyrocketed shortly after BONK’s launch.
The increase in liquidity resulted from the BONK airdrop distributed to builders and projects in the Solana ecosystem. BONK airdropped 50% of its 100 trillion supply to Solana developers, artists and collectors, and OpenBook traders.
With new money injected into the Solana ecosystem, the price of SOL soared significantly. SOL rose from its low of $9 to $16 within a few days. Currently, SOL trades around the $20 mark and is ranked as the 11th cryptocurrency by market capitalization. This seems to be a favorable recovery for the Solana ecosystem after the token fell below the 20th position shortly after the FTX and Alameda’s “disaster class.”
Similarly, BONK now trades at $0.0000011 at the time of writing. Although the token has recently lost 15% of its value, early holders still boast of gains above 1000%.