TRUMP and MELANIA Break the Crypto Market

Only 48 hours away from taking over the United States presidency, Donald Trump announced the launch of a TRUMP meme coin on his official X

Shortly before assuming the presidency, Donald Trump launched his own meme coin on Solana, and Melania Trump followed suit a day later. The event caused major congestion issues on the Solana network as millions of users flooded the network to trade the tokens.

In a conversation with BeInCrypto, Chris Chung, CEO of Solana swap platform Titan, said that the bottlenecks stemmed from decentralized applications (dApps) instead of the blockchain itself, and that the event proved that Solana was ready for mainstream adoption.

TRUMP and MELANIA Break the Crypto Market

Only 48 hours away from taking over the United States presidency, Donald Trump announced the launch of a TRUMP meme coin on his official X and Truth Social accounts.

Within a day of the meme coin’s launch on the Solana network, TRUMP reached a market capitalization of over $14.5 billion and a trading volume of more than $26 billion.

Taking note of the success of her husband’s meme coin, Melania Trump launched her own MELANIA coin a day before Trump’s inauguration.

Shortly after launch, the MELANIA’s market cap exceeded $5 billion. This rapid and sharp spike caused the TRUMP token to drop by $7.5 billion within ten minutes.

It also shook performance across the Solana network.

Users Report Congestion on Solana Amid Increased Traffic

Given the unexpected launch of these presidential tokens, the Solana ecosystem saw a surge in transaction levels as users scrambled to engage in trading. Soon enough, reports of congestion and failed transactions surged across various platforms.

“During the TRUMP launch, the entire Solana ecosystem handled it flawlessly. There‬‭ were no issues with the block production nor network congestion then, partly due to‬‭ the meme coin launching at night in North America and uncertainty whether it was‬‭ real or not. As liquidity was disbursed throughout the network, there were instances‬‭ of price discrepancies as new pools were added. The issues came when MELANIA launched. With the precedent of TRUMP,‬‭ extremely large numbers of traders started either rotating into the new token or‬‭ moved to sell TRUMP with record-breaking volumes,” Chung told BeInCrypto.

Though the unexpected traffic certainly tested Solana’s infrastructure, Chung emphasized that the bottlenecks could be traced back to the decentralized applications (dApps) handling the transaction volumes.

On the day of the MELANIA coin launch, Phantom, a leading wallet provider on Solana, took to social media to inform the public that it was experiencing a strain on its infrastructure.

“We’re currently experiencing a massive surge of 8,000,000+ requests per minute. While we work to stabilize our platform, transactions may have trouble going through on the first try,” the X post read.

Meanwhile, Jito Labs, a key infrastructure provider for the Solana network, reported that its Block Engine API was experiencing “severe degradation” due to the overwhelming volume of transactions.

Most validators on the Solana network use services like Jito Labs, designed to help transactions execute faster. Amid the MELANIA launch, the provider’s degraded performance caused priority fees to go up for the base chain.

“This in itself is the intended mechanism in order to prioritize‭ higher value transactions; however, some applications experienced issues as their‬‭ max gas fee was no longer high enough for their users’ transactions to land. In‬‭ addition, the heightened traffic also caused some critical APIs to go down as their‬‭ services were overwhelmed, which led to some disruptions in the market,” Chung explained.

The increased market demand also hindered the effectiveness of arbitrage bots, which typically help keep prices at bay.

Arbitrage Bots Fail to Stabilize Prices

During the market disruption and congestion, many arbitrage bots were not able to land their own transactions which caused vast discrepancies in prices on certain pools. In particular, we saw some of Titan’s users be able to find pools that allowed them to buy SOL for $150 while the market price was $250. This resulted in many more transactions being submitted to try to take advantage of these arbitrage opportunities, thus causing even more congestion

In response to the increased trading volumes, the Solana blockchain suffered.

The Solana Network Shows Resilience

The significant surge in trading volume on the Solana network, which reached a record high of $10 billion in 24 hours, inevitably placed considerable strain on the ecosystem.

While this high volume of activity resulted in some performance challenges, Chung highlighted that the Solana blockchain remained operational throughout the period.

The event demonstrated the network’s resilience by continuing to process transactions and maintain network stability despite the reduced performance of Solana-based dApps.

In fact, the launches were well handled by the blockchain itself. The priority fee mechanism worked as intended, and it was mainly dApps that were having trouble keeping up. It just shows that now is the time for applications and ecosystem participants to upgrade and evolve to be able to handle the future amount of traffic that everyone believes is possible

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