Greater than 51,000 merchants incurred losses on Kanye West’s just lately launched memecoin, highlighting the potential dangers of buying and selling celebrity-endorsed tokens with no intrinsic technological utility.
The Kanye West-linked YZY (YZY) token was launched on the Solana blockchain on Aug. 21. It rallied 1,400% inside the first hour earlier than dropping over 80% of its worth.
Of the 70,200 merchants who invested within the celebrity-endorsed token, greater than 51,800 realized losses, with three merchants dropping over $1 million, in response to blockchain knowledge platform Bubblemaps.
“In the meantime, 11 wallets made $1M+,” wrote Bubblemaps in a Wednesday X put up.
Amid large-scale losses from the vast majority of the token’s merchants, solely 11 out of 70,000 wallets generated over $1 million in revenue, whereas 99 generated over $100,000, highlighting the monetary dangers of celebrity-endorsed meme tokens with a scarcity of blockchain utility.
In the meantime, the YZY token’s worth is down over 80% from its all-time excessive, buying and selling at $0.5515 with simply 19,531 merchants holding the token, knowledge from blockchain intelligence platform Nansen exhibits.
Former kickboxing champion Andrew Tate was among the many merchants trying to revenue from the rapper-endorsed token. Tate opened a 3x leveraged quick place on the YZY token, resulting in a complete $700,000 loss on the Tate-related Hyperliquid account, Cointelegraph reported on Friday.
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Hayden Davis ‘sniped’ YZY token launch for $12M: Bubblemaps
Following the YZY incident, the blockchain knowledge platform pointed to Hayden Davies, the co-creator of the Official Melania Meme (MELANIA) and the Libra token, as one of many potential insiders.
Davies obtained renewed entry to his funds on Aug. 21, after a decide had unfrozen $57.6 million in USDC (USDC) stablecoins tied to the Libra token scandal, Cointelegraph reported.
“Regardless of our collective efforts as investigators, builders, and communities – the identical names hold working the identical scams,” wrote Bubblemaps in a Wednesday X put up, including:
“The following day, Davis (Kelsier) sniped the YZY launch and made $12M.”
“Naseem: A community of snipers tied to Naseem, well-known for making $100M on TRUMP, was first to purchase YZY. These snipers are constantly first, printing hundreds of thousands,” added the platform.
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Regardless of leading to vital retail curiosity spikes, most celebrity-endorsed cryptocurrencies fail to realize traction and rise to change into large-cap tokens.
Over 30 celebrity-endorsed tokens launched on Solana in June 2024 and have seen costs fall by at least 73.23%. Celebrities endorsing these tokens included 50 Cent, Caitlyn Jenner, Iggy Azalea and soccer legend Ronaldinho Gaúcho.
Tate additionally jumped on the Solana memecoin bandwagon on June 7, 2024, endorsing greater than 10 tokens, most of which misplaced round 99% of their worth shortly after the endorsement.
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