According to blockchain data, the developers behind Solana-based altcoin project Bonk Inu (BONK) burned more than 5 trillion coins, or 5 percent of the total supply, early Friday. The team stated that the project has effectively burned all the tokens reserved for its developers. Here are the details…
Burning for Solana-based altcoin
Solana community members considered the burning process a step towards the legitimacy of the Bonk Inu project. As we reported on cryptokoin.com, BONK actively avoids insider trading, token sales and predatory behavior, calling itself “a token created by people, for people”. Over the past 24 hours, centralized exchanges and decentralized apps alike have offered BONK-based trading events and NFT mintings, increasing the utility of the meme coin for traders and holders.
The data shows that more than three million BONK transactions were made in the last three days, indicating the active participation of the owners. Wallets holding unique BONK have risen from under 25,000 earlier this week to over 86,000 as of Friday. However, massive token sales thwarted Bonk’s price increase, which was over 2,000 percent last week. The token has dropped over 40 percent in the last 24 hours as initial investors take profits and crypto exchanges like Bybit offer BONK futures, allowing traders to bet against the token. So the token got a big sale.
Why did BONK rise in the first place?
Similar to meme coins like Shiba Inu and Dogecoin, Bonk Inu’s rapid rise can be attributed to several factors. Last week, Bonk developers airdropped 50 percent of their entire token supply to several Solana-based NFT collections and creators, resulting in almost instant hype. A total of 297,000 individual Solana-based NFT owners are said to have received the airdrop. Airdrops refer to the distribution of a cryptocurrency token to a large number of wallet addresses, usually for free, and are often used as a tactic to gain users.
While the project distributed a small portion of its token supply to individual traders, it emerged as a move against the “toxic token economy” of embattled funds like Alameda Research, many of which have been widely criticized by private investors and project developers. Some Solana projects have already integrated BONK tokens to be used as payment for listed NFTs. Some have introduced “burn” mechanisms for NFT-based events.
As such, liquidity pools on Solana-based decentralized exchanges (DEXs) like Orca have attracted over $20 million in volume for trading pairs that include BONK, and have cumulatively provided thousands of dollars for liquidity providers. Liquidity providers are investors who stake their cryptocurrencies in DEXs to earn transaction fees, often in the form of token rewards. Data from Orca shows that the BONK/SOL pair has handled over $14 million in trading volume, while the BONK/USD pair has surpassed $6.2 million.