In a recent update, Dogecoin [$DOGE] has gained access to the Solana [$SOL] ecosystem.
Thanks to the Sunrise protocol, Dogecoin, which normally existed on its own blockchain, can now be used inside the Solana ecosystem from the 7th of September.
For context, Sunrise is a cross-chain liquidity gateway associated with Wormhole infrastructure. It is designed to bring assets from other blockchains onto Solana in a standardized form.
How is this good news for Dogecoin?
This, in turn, will now allow $DOGE users to access Solana applications without manually navigating the multi-step bridging process.
To avoid complications, Sunrise also uses a unified mint for an incoming asset. This intends to prevent several competing versions of $DOGE from fragmenting liquidity across Solana.
That said, $DOGE has historically had limited DeFi functionality because its blockchain was primarily built for payments.
Now, by becoming accessible on Solana, $DOGE can tap into the chain’s broader DeFi ecosystem. As a result, this would allow users to trade, provide liquidity, and potentially use $DOGE in other financial applications. Here, the list includes platforms such as Raydium, Jupiter, and Kamino.
Early success with a hint of complications
That said, just after three hours of going live on Solana, $DOGE reportedly generated more than $10 million of Solana trading volume. In fact, over the last 24 hours, the volume has reached $19 million.
It’s pretty obvious that making $DOGE easier to trade and use on Solana can increase accessibility, liquidity, and potentially demand. However, it’s also important to note that none of those will automatically cause $DOGE’s price to rise.
This was proven as $DOGE saw a modest drop in the past 24 hours as it traded at $0.08915 at press time. Additionally, AMBCrypto also reported that Dogecoin traders appear to be losing momentum, with selling pressure increasing and overall trading activity declining.
But with a hike of 27.2% in the past month, hope remains.
This coincided with Solana posting a strong 41% August rally. However, Robinhood Chain overtaking Solana in daily DEX volume has added to the ongoing FUD.
Impact on $DOGE’s liquidity and $SOL’s memecoin activity
Yet despite these roadblocks, this integration could become a catalyst for a new wave of $DOGE liquidity and memecoin activity on Solana. However, the real catalyst would be sustained liquidity and trading activity, rather than the initial launch-day volume alone.
This comes on the heels of $DOGE’s perpetual market remaining highly volatile, with several sharp liquidation spikes as price moved between roughly $0.08 and $0.09.
All in all, the above chart clearly shows that long liquidations have dominated several September sessions, reinforcing the risk of crowded bullish positioning. Meanwhile, the Solana memecoin market cap was trading at $3.69 billion at press time after a drop of 3.4% in the last 24 hours.
Final Summary
- A Dogecoin user can now access Solana applications without manually navigating the multi-step bridging process.
- This might increase accessibility and liquidity, but none of those would automatically lead to $DOGE’s price surge.