Over 51,000 traders suffered losses on Kanye West’s newly launched memecoin, illustrating the risks associated with trading celebrity-endorsed tokens that lack intrinsic technological value.
The YZY (YZY) token, linked to Kanye West, was introduced on the Solana blockchain on August 21. It surged by 1,400% within the first hour before plummeting by over 80%.
Of the 70,200 traders who engaged with the celebrity-backed token, more than 51,800 incurred losses, with three traders individually losing over $1 million, as per data from blockchain platform Bubblemaps.
“At the same time, 11 wallets amassed over $1M,” stated Bubblemaps in a Wednesday X post.
Although a significant number of traders faced losses, only 11 out of 70,000 wallets turned a profit exceeding $1 million, while 99 managed to yield over $100,000, emphasizing the financial dangers of meme tokens endorsed by celebrities without blockchain utility.
Currently, the YZY token’s price has fallen by over 80% from its peak, trading at $0.5515, with just 19,531 traders holding onto the token, according to data from blockchain intelligence platform Nansen.
Andrew Tate, a former kickboxing champion, was among those trying to profit from the rapper-endorsed token. Tate took a 3x leveraged short position on the YZY token, resulting in a total loss of $700,000 on the Tate-related Hyperliquid account, according to a report by Cointelegraph on Friday.
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Hayden Davis “sniped” YZY token launch for $12 million: Bubblemaps
In light of the YZY situation, the blockchain data platform pointed out Hayden Davies, co-creator of the Official Melania Meme (MELANIA) and Libra token, as a potential insider.
Davies regained access to his funds on August 21, after a judge unfroze $57.6 million in USDC (USDC) stablecoins connected to the Libra token scandal, reported Cointelegraph.
“In spite of our collective efforts as investigators, builders, and communities, the same names keep running the same scams,” wrote Bubblemaps in a Wednesday X post, and added:
“The next day, Davis (Kelsier) sniped the YZY launch and made $12M.”
“Naseem: A network of snipers associated with Naseem, known for generating $100M on TRUMP, was the first to buy YZY. These snipers consistently lead, earning millions,” the platform further stated.
Related: Ether trader nearly wiped out after epic run from $125K to $43M
Despite generating notable retail interest, most celebrity-endorsed cryptocurrencies struggle to gain momentum and achieve large-cap status.
Over 30 celebrity-endorsed tokens debuted on Solana in June 2024, experiencing declines of at least 73.23%. Celebrities endorsing these tokens included 50 Cent, Caitlyn Jenner, Iggy Azalea, and soccer icon Ronaldinho Gaúcho.
Tate also joined the Solana memecoin trend on June 7, 2024, endorsing over 10 tokens, most of which saw a significant drop of about 99% shortly after the endorsement.
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