The memecoin market received a significant boost last week with the return of Keith Gill, known as "Roaring Kitty" on Reddit's r/WallStreetBets. Gill, who played a pivotal role in the 2021 meme stock frenzy, re-emerged on X (formerly Twitter) after a hiatus since June 2021. His post, which featured a meme signaling imminent action, quickly ignited excitement within the meme stock community.

The impact of Gill's tweet was immediate and substantial. Both GameStop (GME) and AMC stocks experienced high volatility, leading to multiple trading halts. GME saw an astonishing 100% spike before trading pauses were enforced.

Gill's influence, while initially centered on the stock market, also permeated the on-chain memecoin community. For example, on the Solana blockchain, the GME memecoin—unrelated to the company but sharing its ticker—surged by 460% following Gill's post. Unlike traditional stocks, these tokens did not face trading halts.

Solana has become a prominent network for memecoins, largely due to its low transaction fees, which attract traders and foster a vibrant token ecosystem. The recent launch of pump.fun, a platform designed to simplify token creation, further boosted Solana's memecoin activity. Pump.fun's revenue peaked at $1.23 million on May 14, the day after Gill's tweet, as many users sought to create new popular tokens.

However, pump.fun faced a setback last week when a former employee exploited the platform, using a flash loan and unauthorized access to withdraw authority, resulting in a $1.9 million heist. Despite this, the platform quickly resumed operations and offered free trading for a week following the incident.

The resurgence in memecoin trading has kept Solana's transaction fees relatively high. On average, $1 million is spent daily on Solana transactions, a stark contrast to the $50,000 daily fees seen in early 2023. This indicates sustained high usage despite the overall fee levels being lower than the peak memecoin trading period in mid-to-late March.

In contrast, Ethereum has experienced a significant drop in block demand, resulting in some of the lowest total fees paid on the network in recent memory. It is now rare for Ethereum's daily fees to reach $4 million, a sharp decline from the previous norm.

This shift has led to a new high in the ratio of Solana's fees relative to Ethereum's. On some days last week, Solana's revenue was over 60% of Ethereum's, a notable increase from the fractions of a percent seen at the end of last year. This highlights Solana's growing dominance and its reputation as a fast and cost-effective alternative in the post-FTX era.

Conclusion

The return of "Roaring Kitty" has revitalized interest in memecoins, particularly on the Solana blockchain. With its low fees and active development environment, Solana continues to attract traders and developers alike, cementing its position as a formidable player in the crypto space. Meanwhile, Ethereum faces challenges in maintaining its transaction fee levels, highlighting the evolving dynamics between these two prominent blockchain networks.