Solana is a chain I never talk about.
Essentially this is a network that I never touch with a ten-foot pole because it's clearly an unstable centralized VC chain. Failure over the long term is somewhat baked into the cake. At the same time it's a bit undeniable at this point that Solana has been the ultimate source source of the year-three shitcoin casino that we experience every cycle. Hundreds of millions of dollars have poured into meme-coin products over the last however many months. Fortunes have been made and lost as is often the case within these walls of the shitcoin casino.
That's right, it's memes again!
If I'm being honest I really didn't think it would be memes again. In fact I'm on record as guessing pretty much every other narrative besides memes. Why not social media or games or AI or sustainable DEXes? Nope! Memes again! Deals with it. Then again I guess at the end of the day it doesn't matter what the garbage smells like... it's all getting taking out to the dumpster sooner or later.
Presales though
The interesting thing about this particular wave of greed is how the tokens themselves are issued. The layman term seems to be "presale", but what is a presale and how is it different than the ICOs of 2018? After the most basic cursory search we find that presales have another name: Initial DEX Offering. This implies that the money being used to purchase the token is being pumped into a liquidity pool of some sort.
Saying so many things in so few words.
Such poetry.
Funny how the bit that stands out the most here for me is the idea that if you retweet and link your wallet address you'd receive bonus coins. Could it be any more centralized? Actually it could, which is kinda the point being made here.
So while these particular tokens being issued might be worthless, lacking utility and fundamentals by design, the way in which they are issued does have some value. The ICOs of 2018 allowed dev teams to premine 100% of the tokens. The DEFI assets of 2020 allowed free-farming the tokens without incurring any risk. These presale IDOs seem to potentially solve both of these problems.
The initial investment gets put into a liquidity pool creating a sort of fair-launch that avoids a premine while also setting the price and making sure the token doesn't pump and dump on razor-thin orderbooks. It's not a bad way of booting up a new asset, but the question that often gets ignored in crypto is the one where we forget to ask if we SHOULD do a thing just because we CAN. YOLO.
Yet another use-case for time-locks.
Not all IDOs are created equal and they come with their own custom ruleset. Will investors be given access to their LP after a certain amount of time? Will those tokens get permanently locked or eventually burned? These decisions are in the hands of the dev team at launch and are chosen strategically to lure investors into the project while being used as a marketing ploy. This isn't necessarily a bad thing depending on how it's done, but then again literally half of these launches are outright scams so that ought to tell of something in itself. Everyone loves the idea of the long-shot moonbag; so much so that they'd purposefully risk a coin-flip chance of being instantly rug-pulled right at the get-go. Greed is boundless.
Do these IDOs come with any systemic risks?
I've been told by a few of my fellow crypto peers that many of these presales are set up in a way that introduces bear-market risk to Solana. Something along the lines of these meme-coins being collateralized by a fraction using the SOL token. Is Solana creating some kind of weird fractional reserve with these listings? Are they going long on worthless garbage? Will the chickens come home to roost? Ah, well, the bear market always comes every four years. The only real question is how bad it will hit. My only advice is to start rotating into Bitcoin in 2025 when it's underperforming and nobody wants to play it safe. This time is not different.
Macro cycle
Crab crab crab! Summer is still boring and wholly unpleasant for alts. Sentiment is shockingly low considering where we are at. I must say it does feel a bit like early 2021 when BTC crashed from ATH to $30k and everyone was in full-on it's-so-over mode. Is it just me or are people more fickle during this one? Maybe I'm just more used to it from experience. Unclear. All I know is that I won't expect any excitement until we get out of Q3 and into another completely ridiculous election season. Are you voting for the felon or the vegetable? I'm guessing the empire in decline will continue on the same path either way.
Conclusion
While I can't really condone Solana or any of the pointless greed-driven meme-coins they've created... it is still interesting to witness an evolution in the way projects are bootstrapped. It's nice to see that crypto users finally understand that premines are wholly inappropriate and unacceptable. At the same time the emphasis on liquidity is akin to killing two birds with one stone. Progress is slow, but it's still progress.