Solana AI Hackathon Slammed for Token Frenzy: $50M Market Cap Projects Raise Concerns

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  SendAI Founder has criticized the subtle abuse of the Solana AI Hackathon by developers.

• The Solana ecosystem remains on the radar amid memecoin frenzy.

Developers on the Solana Artificial Intelligence (AI) Hackathon recently received criticism from SendAI creator Yash Agarwal. The SendAI founder and curator of the Solana AI hackathon slammed developers for consistently launching new tokens over a short timeframe. 

Why Solana AI Hackathon Curator is Worried

In a recent article, Agarwal pointed out that two to three Solana hackathon builders have launched tokens whose market capitalization has reached $50 million. According to him, this dramatic market cap increase raises questions regarding the viability and sustainability of these recently initiated projects.

For perspective, Solana announced the launch of the first Solana AI Hackathon on December 11, 2024. Powered by SendAI, the hackathon aims to build AI agents and tools on the Solana blockchain. It marks an important milestone in integrating Artificial Intelligence with blockchain technology. 

The rewards range from $5,000 to $30,000 and are meant to inspire genuine crypto AI initiatives. Over 400 projects have registered for the Solana hackathon in less than a month.  SendAI provides developers on the AI hackathon access to expert mentoring, idea boards, and resources. Also, these projects could raise venture financing or launch their token.

 While Agarwal acknowledged the hackathon’s success, he highlighted a current token launch frenzy by builders. The SendAI founder criticized this phenomenon and condemned the Solana AI Hackathon for becoming a “gambler’s paradise.” 

He added that the Solana AI Hackathon has unintentionally become an AI token discovery platform.

Furthermore, Agarwal noted that some builders have leveraged the Solana Hackathon and SendAI to add credibility to their projects. He said these developers submit projects in the hackathon, then proceed to launch tokens that get promoted by whales and some industry stakeholders.

Blockchain users who think they have a potential 100x project coming out of hackathon quickly snap these tokens. Agarwal said this situation creates a fertile ground for speculation. 

“While it’s great to see some builders launching tokens and using them as a means of capital formation — but as with any shiny meta, the froth is too much now,” he noted.

Whale Influence and Agarwal’s Advice to Solana Hackathon Builders

Agarwal emphasized that many projects simply release random announcements or demos, even with over $200 million market cap, to delight users for a quick pump. Eventually, these tokens plummet when the excitement cools off. 

The SendAI founder highlighted that whales and cabals in the crypto industry exacerbate the current situation. According to him, these entities accumulate good supply or persuade builders to give token allocation. They pump the tokens by fabricating stories that the projects are genuine and backed by industry stakeholders.

Subsequently, the price plummets when whales dump the tokens, harming retail investors and builders. As a result, Agarwal advised genuine builders to focus on launching tokens with vision and long-term prospects. 

For investors, Agarwal advised them not to bet on any project they lack understanding of. “You’ll be the BIGGEST loser in all of this eventually, looking for quick gains,” He said.

Meanwhile, many analysts believe Solana is on the brink of a breakthrough. As disclosed by CNF, some analysts think Solana, currently trading at $217, could jump to $320 soon, reaching $440 by mid-2025.