Libra (LIBRA): how did memcoin bring down the Solana ecosystem?

Between 2024 and 2025, interest in memcoins has increased significantly, as evidenced by the dramatic increase in the market capitalization of tokens such as Dogecoin (DOGE) and Shiba Inu (SHIB).

One of the latest sensations in this area was the Libra memcoin (LIBRA), which first skyrocketed and then lost 95% of its value, dealing a severe blow to the Solana ecosystem. In this article, let's break down the reasons for this collapse and its implications for the Solana network.

The rapid rise and fall of LIBRA

The LIBRA memcoin was launched on the Solana network in early 2025. Thanks to an active marketing campaign and support from popular crypto bloggers and Twitter communities, its value began to skyrocket. One of the main factors behind its popularity was the interest of famous personalities in the crypto industry. Among those who openly supported LIBRA were:

• Elon Musk — the billionaire owner of Tesla and SpaceX, known for his support of Dogecoin, published a tweet with an image of the LIBRA symbol, which triggered a massive increase in interest in the token.
• Changpeng Zhao (CZ) — former CEO of Binance, mentioned in an interview that LIBRA is a promising asset on the Solana platform, which triggered an influx of institutional investors.

Within the first two weeks, the token price increased from $0.0001 to $0.02, an increase of more than 19,900%. Trading volume reached $1.2 billion per day at its peak, making LIBRA one of the most popular assets on exchanges such as Binance and Coinbase.

However, this growth was not backed by fundamental values. Unlike significant cryptocurrencies such as Bitcoin and Ethereum, memcoins almost always lack technological advantage or real-world use cases. As a result, LIBRA fell victim to a classic "pump and dump" scheme where early investors sold off their holdings en masse at the peak, causing the price to collapse. Within three days, the value plummeted 95%, and the capitalization dropped from $5 billion to $250 million.

The main reasons for the collapse of LIBRA

Unlike Ethereum, which provides smart contracts, or Solana, which provides high-speed transactions, LIBRA offered no actual functionality other than speculative investment.

Data from analytics platform Nansen showed that over 80% of all LIBRA tokens were in the hands of the 50 largest wallets, indicating centralized asset control. This allowed organizers to dump assets dramatically, leaving retail investors at a loss.

Another reason is the lack of regulation. Since the memcoin market is largely unregulated, creating and promoting projects like Libra (LIBRA) does not require strict checks.

Panic among investors also played a role in Libra's collapse. Within the first hours after the price plummeted by 50%, numerous posts with the hashtags #LIBRA and #ScamAlert began appearing on Twitter and Reddit. Major crypto-analysts have stated that the market may have been manipulated. According to data from analytics platform Santiment, the number of mentions of LIBRA on social media increased by 300% overnight, with the vast majority of comments being negative.

Major cryptocurrency exchanges such as Binance and Coinbase saw massive token sales. Within 24 hours, the sales volume exceeded $1.5 billion, driving the price down another 40%.

Some large token holders (so-called "whales") tried to stabilize the exchange rate by buying up large volumes of LIBRA, but overall confidence in the asset had already been undermined. A wave of indignation started in Telegram groups of investors, with some users demanding regulatory intervention and investigation of possible price manipulation schemes.

Consequences for Solana's reputation

The collapse of LIBRA had a negative impact not only on investors but also on the Solana ecosystem itself.

Many users began to perceive Solana as a platform for speculative assets. Messari analysts noted that the number of new addresses in the Solana network dropped by 15% after the collapse of LIBRA.

During the panic, the number of transactions on the Solana network exceeded 800,000 per minute, resulting in a temporary slowdown of the blockchain and a 3x increase in fees. Such problems have already happened in 2023, when the Solana network experienced failures due to congestion.

In addition, after Libra's collapse, the US Securities and Exchange Commission (SEC) launched an investigation into the activities of some projects on Solana, which increased investors' fears.

Conclusion

The LIBRA situation was an important lesson for the entire crypto industry. While memcoins may bring short-term benefits, their long-term impact on the ecosystem is often negative. Solana, as one of the leading blockchain platforms, should prevent such incidents to preserve its reputation and attract serious investors and developers.