Bonk: The Rising Dog Coin on Solana - Complete Analysis and Investment Prospects
Dog-themed coins were a massive trend in cryptocurrency a few years ago when Elon Musk started pumping Dogecoin. This then led to an avalanche of developers creating crypto projects and naming them after dogs.
Most of those projects were complete failures. Though a few dog coins did succeed such as Shiba Inu.
With this as context, a new dog coin called Bonk was launched on the Solana blockchain on December 25th, 2022. The project saw almost immediate success with the price jumping nearly 4,000% within the first week of launch.
Anyway, this article will cover absolutely everything you need to know about Bonk. This includes the brief history of Bonk, the viability of this project, and whether or not it’s a good investment.
What is Bonk?
As mentioned previously, Bonk is a dog coin on the Solana blockchain. Now, Bonk is considered a dog coin despite not being named after a dog breed. There is a Bonk Dog meme with the doge dog getting bonked on the head, so that’s close enough.
The Brief History of Bonk
The token launched on December 25th, 2022 to not much fanfare. The project has a very small website that briefly explains that the token was started in response to “toxic Alameda tokenomics.” The entire point is based on creating a memecoin with a big community and fair tokenomics.
The popularity of the project changed somewhat quickly when the founding team started airdropping tokens to wallets on the Solana blockchain. These wallets overwhelmingly belonged to developers of different projects on the Solana blockchain.
The price of the token rose very slowly for the first week of its launch. However, it slowly started increasing on New Year’s Day and went fully parabolic a day or two later. The price eventually peaked on January 5th, 2023 at $0.000004617.
Note: The price is so low because the token has a total supply of 56 trillion. This is standard practice for dog coins.
The price of Bonk collapsed shortly after that, which prompted the team to burn the tokens allocated to them. The burning caused the price to spike back to almost the same level within a few hours of the burning.
That spike was short lived, though. The price dropped nearly 750% in the three days after the burn, which is unfortunate despite being somewhat expected of people in the cryptocurrency industry.
What We Like About Bonk
There are some good things about Bonk worth mentioning. This section will outline all the bright spots of this project. It is important to put these good points in the context of some of the problematic aspects of the project, which we will do in the next section.
Founders Burned Their Tokens
The first thing we like about Bonk is that the founding team has burned some of their tokens. They did not originally do this, which made us extremely weary. Burning some tokens at least shows that the founders will sacrifice profit in order to ensure the success of the project.
Solana Does Not Have a Dog Coin
The other thing we like about Bonk is that it is the first major dog coin on Solana. In fact, Solana does not really have memecoins.
Now, we are not saying that a blockchain needs a memecoin, but it is good for the long term future of Bonk that they have first mover advantage. For those that do not know, first mover advantage is incredibly important in the world of cryptocurrency.
We can use Shiba Inu as a good example, it was the first dog coin that really caught on other than Dogecoin. It spawned a lot of copycats, but none of the copycats were able to capture the same level of success as Shiba Inu.
Does $BONK Have a Long Term Future?
It’s difficult to know whether or not Bonk has a long term future because the token is only a few weeks old. There’s a chance for the founders to rug the project, but that seems unlikely at this point as they have burned all their tokens.
With that in mind, we are still very skeptical of the long-term future of this token for the following reasons:
There’s No Plan
The first problem we have with Bonk is there is no long term plan for Bonk. The website is extremely small and contains very little information. Even the whitepaper is only two pages long.
There is some mention of a three year vesting schedule for the founders and the eventual creation of a DAO to run the project, but that’s it.
This reminds us of Shiba Inu, which launched with literally no plan. SHIB is currently the 16th largest cryptocurrency by market cap, so it worked out well for them.
Solana is a Smaller Blockchain
The other problem we have with Bonk is that it’s based on Solana, which is a smaller blockchain. It’s important to note that Solana is a smaller blockchain – it’s the 14th largest cryptocurrency by market cap, so it’s still relatively large. It’s also the fifth largest smart contract enabled blockchain behind Ethereum, Binance Smart Chain, Polygon, and Cardano.
It’s important to note that there is a massive difference between the top two cryptocurrencies and the #14 cryptocurrency. Ethereum’s market cap is $154 billion and Solana’s market cap is $5 billion.
That’s a 30x difference in size between Solana and Ethereum, which will surely have an impact on the size that Bonk can reach. One good thing about Solana, however, is that the gas fees on the blockchain are extremely low.
The Token Distribution is Not Ideal
A major issue we have with Bonk is the token distribution is extremely lopsided.
That’s really, really bad. If any of the wallets in the top 20 decide to sell all their tokens at once, then the price will completely collapse.
Just look at the token distribution below:
We can ignore the multisig wallet, treasury wallet, Huobi, MEXC, and Gate.io addresses. Even with that there are still 26 wallets that hold over $1 billion dollars worth of tokens in a single wallet.
This means that the fate of Bonk is in the hands of the owners of these wallet addresses. If one of these owners decides to sell, then the price of $BONK could fall to a point where it might not recover.
That’s the risk with these smaller projects – a whale or two selling their stake could collapse the project. This would basically doom the project if the price crashed because the project is so young.
Anonymous founders are typically not something you want to see in a cryptocurrency project. It just makes it too easy for the founders to disappear with all the money and leave investors holding the bag.
However, memecoins operate a little differently. The focus is so heavily on the community that they often work better when they have anonymous founders that burn all their tokens.
The founders of Bonk have burned their tokens from what we can tell, which is a good sign. This shows that they have an interest in keeping the project running and are not looking for an immediate cash grab.
Anonymous founders are still something that makes us weary. And it does make us question the long term viability of this project if the founders have burned all their tokens. What is their incentive to continue the project if they have burned all their tokens?
Our assumption is they have tokens in their personal wallets, which brings us to the original point. What’s to stop them from dumping the tokens and running off with everyone’s money?
Is $BONK a Good Investment?
Note: This is not financial advice. Do your own research before making an investment.
$BONK has some very good things for it. However, we do not believe that $BONK is currently a good investment.
The general trend with projects like this is that they have a big initial jump before flatlining. They then may have another jump in a few weeks or months.
Shiba Inu had a similar trend before skyrocketing in price a few months later.
With all this in mind, $BONK is what we could consider a high risk high reward investment. This means that it has the potential to greatly increase in price, but it also has a somewhat high chance of going to 0.
This is the type of project we would put a small amount of money into, forget about it, and hope it’s worth some money in a few months or years. It’s definitely a project that you should allocate any significant amount of your portfolio into.
In fact, we would not even consider $BONK a portfolio investment as we would only put what amounts to pocket change into this project. Remember, this is still a memecoin.
Where to Buy Bonk?
Bonk is available on Huobi, Gate.io, Bybit, and Raydium. Raydium is a decentralized exchange on Solana, which makes it the most secure way to purchase $BONK.
If you prefer using a centralized exchange, then Huobi is your best bet as the majority of the trading volume for $BONK occurs on Huobi in the USDT/BONK trading pair. Gate.io and Bybit are also both good options as well.
That really covers it for everything you need to know about what is going on with Bonk. It’s a memecoin project on Solana.
It’s definitely one of the more promising memecoin projects and it does have potential to bring Solana more publicity. However, it’s still a memecoin at the end of the day and extreme caution should be used when considering this token as an investment.