Last Updated on January 4, 2023 by Bitfinsider

Despite larger cryptocurrencies like Bitcoin (BTC) and Ether (ETH) scarcely moving, Solana’s SOL has increased by over 20% in the last day. This is because the newly created shiba inu-themed token Bonk (BONK) decided to execute a significant airdrop, which sparked interest in the Solana community.

After losing for almost nine days in a row, SOL traded at just over $8 on Friday before soaring back above $13 on Tuesday. Due to Solana’s strong ties to Sam Bankman-Fried, the discredited founder of the cryptocurrency exchange FTX, who is accused of fraud and misappropriating client cash, selling pressure had been created.

According to data from Coinglass, short positions of $6.7 million have been closed as a result of the recent price increase. Since the demise of the FTX exchange and the ensuing market meltdown in November, this is the biggest short sale. Funding rates for SOL perpetual swaps are extremely negative, indicating that traders are bearish and betting on the token’s price to decline, a strategy known as shorting.

Bonk’s airdrop, which represented 50% of its token supply, most likely sparked a lot of community interest. A total of 20% of the airdrop supply is going to Solana NFT collections, which include 297,000 individual NFTs, and 10% is going to artists and collectors that specialize in Solana. An airdrop is an uninvited, usually free release of a cryptocurrency token or coin to a large number of wallet addresses. They are typically employed as a user acquisition strategy.

In only the last 24 hours, Bonk observed on-chain volumes of over $19 million. Since its launch on December 25, Bonk has amassed over 85,000 holders and a market value of almost $93 million as of Tuesday. In the last week, users have used bonk tokens in over 500,000 transactions, according to statistics.

Bonk coins have already been included by a number of Solana projects for use as payments for listed NFTs, and some have even added “burn” methods for NFT-based events. Burning tokens depletes a cryptocurrency’s supply of coins overall.

In the last 24 hours, bonk prices increased by around 95%. Dogecoin (DOGE) and Shiba Inu (SHIB), two significant memecoins, remained untouched.

The crypto community has a reputation for being irrationally enthusiastic about memecoins, with the market valuation of SHIB and DOGE exceeding $30 billion apiece in early 2022.