Transactions have been getting dropped on Solana because it can't keep up with exploding volume, driven by a frenzy for meme coins, Brady writes.

Why it matters: Meme coins, the corner of cryptocurrency that's always been viewed as a bit of a joke, threaten to become a permanent fixture.

• For Solana, a network with a nearly $80 billion market cap, it's a black mark on its big promises about fairness and reliability. If users' transactions are getting lost, that's a bad look.
• But Solana's issue appears transitory. Meme coins, on the other hand? Probably not.

By the numbers: At least six meme coins have circulating supplies worth more than a billion dollars. Lots of them have values in the hundreds of millions of dollars.

• These are coins or tokens with names like bonk, defen, dogwifhat and — of course — dogecoin.

State of play: The number of meme coins is exploding on low-cost blockchains with lots of users, most notably Solana and the layer-2 operated by Coinbase, Base.

• Last week, 16,000 new tokens launched on Solana and more than 26,000 on Base. Compare that to a little over a thousand on Ethereum, the second-largest blockchain, where the whole notion of tokens originated.

Between the lines: First, let's deal with some of the mechanics behind the surge, and then with the argument for why this frenzy of speculation might not be entirely crazy.

• A site has popped up on Solana, called Pump.fun, that makes it super easy to launch a meme coin. It also gamifies trying to come up with one that grabs people's attention.
• This YouTuber demonstrates making one, and it's crazy fast. The site is brand new but has generated over $6.7 million in fees for itself in its first month-and-half of operation.
• Over on Base, it's just a cut-and-paste job, as another YouTuber demonstrates. Five minutes to create a meme coin and make some liquidity available.

Reality check: You think you can play this game? Well, be smart, you're playing against all kinds of automated traders who are watching the chains more closely than you, stealing trades and moving in and out of positions faster than you can think.

• The YouTuber in the first video linked above talks it through live as bots attack the coin he spun up.

Yes, but: The meme coin market might also not be entirely crazy.

• Pantera Capital's Paul Veradittakit published a defense, pointing out that meme coins are a loose way to run a prediction market.
• Imagine, for example, if there had been meme coins for each kid in the Roy family for the show "Succession." Each one's coin might have risen or fallen in value from week to week.
• All without weirdly smart contracts or head-scratching markets.

They're also fun and cheap — and harmless, as long as people don't get in too deep. As Vitalik put it:

• "I value people's desire to have fun, and I would rather the crypto space somehow swim with this current rather than against it."

What's next: Casey Rodarmor will release his spec for better Bitcoin tokens, Runes, next week.

We keep saying it is bitcoin's year, and that's certainly true for publicly traded products, Brady writes.

• Then again, there are a lot fewer publicly traded products for other cryptocurrencies.
• And it doesn't look like that list is going to expand in the U.S., where it counts, any time soon.

🚦Hong Kong could approve spot bitcoin and ether ETFs as soon as Monday. (Bloomberg)

⚖️ Sam Bankman-Fried plans to appeal his conviction and sentence. (Axios)

🥭 The prosecution declined to call a founder of Mango Markets, foiling the defense's plan to cross-examine a leader of the company that Avraham Eisenberg wronged in the trial underway in Manhattan. The defense has not yet served him a subpoena. (CoinDesk)

😵‍💫 CF Benchmarks launched an instrument to allow trading against bitcoin's volatility. (The Block)

Uniswap is the application built by Uniswap Labs, the company likely to be sued by the SEC, soon, Brady writes.

The intrigue: In a worst-case scenario for decentralized finance (DeFi), the SEC could shut down the company, but it cannot shut down Uniswap, the application — no one can.

Zoom in: Shutting down Uniswap Labs would not change the operation of any of the three versions of the Uniswap application, which runs mostly on the Ethereum blockchain.

• They are immutable smart contracts. The only way to take them down would be to shut down Ethereum.
• Case in point: Tornado Cash, despite sanctions and arrests, is still running on Ethereum, and it always will.

In the weeds: Uniswap has three different versions, running on 16 chains.

• Uniswap v1 only has $10 million in assets on it, with daily volume in the hundreds of thousands of dollars.
• Uniswap v2 is still a going concern, with $2.6 billion in assets and $300 million or so in daily volume.
• Uniswap v3 is a tank, with $3.6 billion in assets and $1 billion or $2 billion in volume daily.

The big picture: Smart contract blockchains have created financial services that don't need humans to operate — a new thing under the sun.

Yes, but: While Uniswap can't technically be shut down, regulators might be able to get American investors to remove deposits, which would have a material impact on its operations.