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1000% yield on BONK for SOL liquidity providers

f12cae42-783a-494b-a9a6-fb532a2ad0c5

Written by

William Miller
Published on

January 4, 2023

Key points: 

  • BONK, the Shiba Inu-themed token launched on Dec. 25, has returned 2,220% to traders over the past week, up 150% in the past 24 hours alone. 
  • The token was airdropped to the Solana NFT community and creators.
  • Liquidity pools on Solana-based DEXs such as Orca have attracted over $20 million in trading volume with BONK pairs.
  • Returns may not last long as the demand and hype surrounding BONK fade and traders take profits in the coming weeks.
  • Several Solana projects have integrated BONK tokens for use as payment for listed NFTs, and some projects have introduced "burn" mechanisms for NFT-based events.

Flat markets and contagion risk haven’t stopped crypto traders from looking for the next big return-generating story, and meme coins are at the heart of the Solana (SOL) ecosystem.

Bonk, the Shiba Inu-themed token launched on Dec. 25, has returned 2,220% to traders over the past week, up 150% in the past 24 hours alone. The token was airdropped to the Solana NFT (Non-Fungible Token) community and creators, resulting in rapid hype and the trading volume for the token.

Early investors aren't the only ones benefiting, however. Liquidity pools on Solana-based decentralized exchanges (DEXs) such as Orca have attracted over $20 million in trading volume with BONK pairs — accruing thousands of dollars in liquidity provider fees.

Liquidity providers are investors who stake their cryptocurrency tokens on DEXs to earn trading fees, usually in the form of token rewards.

Data from Orca shows that the BONK/SOL currency pair generated over $14 million in trading volume, while the BONK/USD pair generated over $6.2 million in volume. Both pools pay liquidity providers nearly 1% per hour or more than 24% per day.

These metrics make Bonk the most traded token on Orca, a popular Solana DEX that trades even more than Solana, which is generally the most popular trading pair for USDC.

So, returns may not last long as the demand and hype surrounding BONK fade and traders take profits in the coming weeks.

Although BONK tokens are designed as meme coins, they are seeing steady adoption within the Solana ecosystem. Several Solana projects have integrated BONK tokens for use as payment for listed NFTs, and some projects have introduced "burn" mechanisms for NFT-based events. According to the tweet, more than 1 billion BONKs have been burnt in the past 24 hours.

Meanwhile, the interest surrounding the BONK may have boosted demand for the SOL token. The native token of the Solana network is up 16% in the past 24 hours, erasing losses from a sharp drop over the past week.


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