Franklin Templeton: Meme Coins’ Strong Network Ties

1. Franklin Templeton research highlights strong correlation between meme coins and native blockchain networks.
2. Meme coins like BONK on Solana demonstrate close ties with network activity, especially during price surges.
3. Despite lacking intrinsic value, meme coins attract traders with low fees and potential for quick gains, but caution is advised due to their speculative nature.

In a recent research note, global asset management firm Franklin Templeton has shed light on the significant relationship between meme coins and their native blockchain networks.

Despite their notorious volatility and lack of inherent value, meme coins maintain a robust connection with networks such as Solana, Ethereum, Arbitrum, Polygon, and Optimism.

Strong Relationship with Native Networks

Franklin Templeton’s research emphasizes the symbiotic relationship between meme coins and their underlying blockchain ecosystems. Networks like Solana have become pivotal in facilitating the trading and activity surrounding meme coins.

For instance, the Solana-based meme coin, BONK, serves as a prime example of this interdependence. During the fourth quarter of the previous year, Solana witnessed a surge in activity coinciding with a price surge in BONK. This is highlighting the close correlation between meme coins and their native networks.

Evolution of Activity Across Various Networks

The research note further delves into the evolving activity across different blockchain networks associated with meme coins.

Franklin Templeton highlights blockchains such as Ethereum, Arbitrum, Polygon, and Optimism, showcasing their role in shaping the landscape of meme coin transactions and trading activities.

No Inherent Value, But Strong Appeal

While meme coins may lack inherent value and utility, Franklin Templeton acknowledges their appeal to certain crypto traders. Low transaction fees and the potential for quick gains make meme coins an attractive proposition for traders seeking short-term profits.

However, the asset manager warns that these tokens hold little to no intrinsic value on their own. This is primarily derived from internet memes.

Caution Amidst Opportunity

Despite the allure of meme coins, Franklin Templeton advises caution to investors, highlighting the speculative nature of these assets. While they may offer opportunities for rapid gains, investors should approach meme coins with diligence and awareness of their volatile nature and lack of fundamental value.

Franklin Templeton’s research underscores the intricate relationship between meme coins and their native blockchain networks. It is emphasizing the need for careful consideration and caution among investors navigating this burgeoning sector of the crypto market.