Markets
Nearly 1 Million New Crypto Tokens Emerged in April
Coinbase director Conor Grogan announced that nearly 1 million new cryptocurrency tokens emerged last month.
This number is double the total created on the Ethereum blockchain from 2015 to 2023. These developments highlight the volatile and often precarious nature of investing in new crypto ventures.
New Meme Coins Dominate the Crypto Market
Grogan highlighted these numbers through the Dune panel chat, indicating a significant expansion in the crypto sector.
Most of this increase in token creation occurred in the Ethereum and Solana blockchains. Specifically, Ethereum saw 376,642 new tokens, while Solana experienced a daily average creation of over 20,000 tokens.
Notably, 886% of new tokens on the Ethereum blockchain, totaling 327,553, debuted on Coinbase’s layer 2 network, Base. This platform has attracted many developers, particularly those focusing on meme coins, due to its low operating costs.
See more information: 7 Best Basic Chain Meme Coins to Watch in 2024
New tokens by Blockchain. Source: Dune
Furthermore, the total value locked (TVL) in the Base was shot has increased by 627% since the start of the year, now reaching a remarkable $5.4 billion, according to L2beat. Meme coins are the main reason for this increase.
However, the crypto community has also criticized the rapid proliferation of meme coins. Many in the community consider these tokens to be high risk, noting that they are often scams to exploit trading bots and inexperienced investors.
“Most of them are just spam farming sniper bots. I saw a guy launching tokens with meaningless names on the base just to pull bots that automatically bought,” a user commented in Grogan’s post.
Additionally, the regulatory environment has been less stringent for meme coins compared to more traditional or innovative crypto projects. Chris Dixon of Andreessen Horowitz criticized this regulatory approach, arguing that it promotes an ecosystem full of trivial projects at the expense of more meaningful blockchain-based solutions.
Investing in this market involves substantial risks. Koryo Crypto, a data scientist, emphasizes the high-risk, low-reward nature of meme coin investments. The barrier to creating new currencies has significantly decreased, leading to market saturation.
“At that time, deploying an ERC-20 token was not something the average person could do easily. But today, anyone can do it,” says Koryo.
Koryo advises investors to diversify substantially if they decide to get involved in meme coins. He warns that without adequate diversification, an investor’s portfolio could fall to zero.
See more information: Scam Crypto Projects: How to Detect Fake Tokens
Furthermore, ZachXBT network detective recently reported that Developers abandoned several meme coin projects on Solana blockchain. This led to a staggering $26.7 million loss for investors.
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