Author: Francisco Rodrigues, CoinTelegraph; Compiled by: Deng Tong, Golden Finance

The ongoing Meme coin trading frenzy during the cryptocurrency bull market has allowed traders to experience dizzying highs and lows, but It appears that those benefiting from the “gold rush” are crypto infrastructure providers.

Meme’s popularity has allowed Solana-based decentralized applications (DApps) to generate record revenue from on-chain activity, with automated market maker Raydium recording record 24-hour fees earlier this month. record $11 million.

Solana’s on-chain activity has exploded in the past few weeks, with the decentralized exchange’s (DEX) daily trading volume soaring from approximately $1.6 billion to a peak of $10 billion, according to Blockworks data .

DEX trading volume on Solana. Source: Blockworks

Cryptocurrency bull markets, including this one, are often compared to the California Gold Rush, which took place between 1848 and 1855 when gold was discovered at a construction site , miners flocked to the area, triggering mass immigration.

By 1853, approximately 250,000 gold miners had moved to the area, and gold mining increased rapidly. Still, it’s widely believed that much of the wealth flows not to miners but to the entrepreneurs who provide them with goods and services.

In other words, the real money was made by those who sold picks and shovels, not those who used them to find gold.

In the cryptocurrency space, it is infrastructure providers that sell the picks and shovels, including trading platforms, blockchain networks, wallet providers, payment systems, and other decentralized applications.

Gracy Chen, CEO of cryptocurrency exchange Bitget, said in an interview that the “pickaxe and shovel” analogy is still relevant in the context of the cryptocurrency market “because it represents cryptocurrency and more. The basic infrastructure required for a broad ecosystem to function.”

Comparing the industry to the California gold rush, Chen pointed to the 2017-18 initial coin offerings (ICOs). The craze ended with various investors losing money, while “ICO founders made huge profits, often including the purchase of luxury goods such as Lamborghinis and luxury villas.”

A Binance spokesperson noted that the “pickaxe and shovel” analogy “is not entirely appropriate for the multidimensional nature of the cryptocurrency market,” but agreed that it “describes entities that provide essential infrastructure and services,” including “Stablecoin issuers, blockchain networks, mining companies and ETFs[Exchange-traded fund] providers and others. ”

In the chart above, it’s clear that decentralized exchanges on Solana are benefiting, as trading volumes (and hence fees) have soared due to the memecoin trading frenzy

David Gogel, vice president of strategy at the dYdX Foundation, said that historically, exchanges “have been the biggest beneficiaries of bull markets as surges in trading volume drive huge fee revenues. ”

Gogel added that while he believes the trend is continuing, in the current market cycle new “sophisticated non-custodial wallets” like Phantom are “capturing through their mobile apps important activity”. They do this by providing seamless integration into an ecosystem that is undergoing a trading frenzy.

Eclipse, the first layer 2 network to bring together Ethereum and Solana CEO Vijay Chetty said that companies like Circle and Tether Such cryptocurrency gateways and asset issuers benefit from the growth in stablecoin supply and serve as on-ramps for users. Token and memecoin launchpads such as Pump.fun are also performing well, Chetty said, adding. Aggregators like Jupiter that facilitate exchange activity, liquid staking platforms like Solana MEV (Maximum Extractable Value) and Jito also generate “significant fees” for tokens, Dune Analytics data shows. Published platform Pump.fun The platform's daily trading volume has exploded over the past few weeks, so much so that it had to deactivate its live streaming feature after facing backlash for the explicit content it hosted. >

Pump.fun daily transactions and total transactions Source: Dune Analytics

Cryptocurrency exchange CEX.IO. Lead Analyst Illia Otychenko Noting that infrastructure providers - including oracles and software development kit providers - are also "well-positioned to thrive," he added that every market cycle introduces a new type of gold.

Otychenko said that in 2021, about 71% of the total value locked in decentralized finance was concentrated on decentralized exchanges and lending platforms, and in the current cycle, this situation has changed, "liquidity staking and re-investment Staking is becoming a major beneficiary” .

However, a Binance spokesperson noted that crypto users may also suffer from the frenzy due to the “unique dynamics of the cryptocurrency market.”Benefit. They added:

“In a gold rush, miners chase gold with limited predictability and strategic foresight. In cryptocurrency markets, participants – including traders, speculators and Investors - access to sophisticated tools, data and strategies to make smarter decisions , more considered decisions.”

As a result, they said that while infrastructure providers will remain critical in the growth of the ecosystem, “winners in the cryptocurrency market are likely to include traders, speculators. and venture capitalists”

Bitget. The same sentiment was echoed by Chen, who said: “Anyone who is good at leveraging advanced technologies can profit from digital assets, not just the developers or providers of these technologies.”

The current crypto market boost may benefit traders and infrastructure providers, but observers are unsure how long the bull run will last.

CEX.IO’s Otychenko said the surge in trading volume “seems unsustainable” after the surge, but added that it “could establish a new benchmark for Solana fees.” He noted that Solana's daily rates surged from $200,000 to $400,000 to $2 million to $3 million in March 2024, then stabilized in the $1 million to $2 million range.

A Binance spokesperson said that while the frenzy showed increased user engagement and activity, its "sustainability remains uncertain." Fee spikes "are often intermittent and closely tied to broader market cycles and specific events."

The long-term outlook will depend on "how market narratives and user behavior evolve." They added:

“To maintain these fee levels and underlying demand, Solana may need to reduce its focus on centralized DApp activity by diversifying use cases and cultivating consistent user engagement across the broader cryptocurrency sub-industry. dependence. ”

They concluded that this could include expansion into gaming, decentralized finance, and “other high-growth areas that may drive long-term utility and engagement.” Business models may also change as the market adapts, and dynamic fee structures may be implemented if fees spike to prohibitive levels.

Bitget’s Chen said we are seeing “a stress test of existing blockchain infrastructure,” adding that addressing high transaction fees and improving throughput “has become urgent again.”