Developers behind Solana-based memecoin project Bonk Inu burned over 5 trillion tokens, or 5% of the total supply, earlier on Friday, blockchain data shows. The move claimed to have effectively burned all tokens earmarked for developers of the project.
Solana community members considered the burn a step towards the legitimacy of the Bonk Inu project – one that calls itself a token “for the people, by the people” by actively avoiding insider token sales and predatory behavior.
Data shows over three million BONK transactions were conducted over the past three days, suggesting active participation from holders. Unique BONK holding wallets have grown to over 86,000 as of Friday from under 25,000 at the start of this week.
However, large token sales have impeded bonk’s price rise, which is now over 2,000% in the past week. The tokens are down over 40% in the past 24 hours as early investors took profit and crypto exchanges, such as Bybit, introduced bonk futures, allowing traders to bet against the token.
The quick rise of Bonk Inu, fashioned around the popular shiba inu dog breed which has spurred popular projects such as Shiba Inu and Dogecoin, can be attributed to several factors.
Last week, Bonk developers airdropped 50% of its entire token supply to several Solana-based NFT collections and creators, resulting in near-instant hype and a market for the project.
Holders of a total of 297,000 individual Solana-based NFTs were said to receive the airdrop. Airdrops refer to an unsolicited distribution of a cryptocurrency token or coin, usually for free, to numerous wallet addresses and are generally used as a tactic to gain users.
The project actively called out the “toxic tokenomics” of embattled funds such as Alameda Research – which was widely criticized for distributing a small part of the token supply to retail traders while keeping a majority for private investors and project developers.
As such, liquidity pools on Solana-based decentralized exchanges (DEX) such as Orca have attracted over $20 million in volume for trading pairs involving BONK – cumulatively netting thousands of dollars in fees for liquidity providers.
Liquidity providers are investors who stake their cryptocurrency tokens on DEXs to earn transaction fees, usually in the form of token rewards.
Data from Orca shows the BONK/SOL pair has conducted over $14 million in trading volume, while the BONK/USD coin pair saw over $6.2 million. Both pools are paying out nearly 1% hourly to liquidity providers, or over 24% each day.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.