Over 51,000 traders faced losses from Kanye West’s newly launched memecoin, underscoring the risks associated with trading celebrity-backed tokens that lack intrinsic technological value.
The YZY token, connected to Kanye West, debuted on the Solana blockchain on August 21. It surged by 1,400% within the first hour but subsequently plummeted by over 80%.
Out of 70,200 traders who invested in the token, more than 51,800 realized losses, including three traders who lost more than $1 million, as per data from Bubblemaps.
“At the same time, 11 wallets made over $1M,” stated Bubblemaps in a Wednesday post on X post.
With significant losses among most traders, only 11 of 70,000 wallets yielded over $1 million in profit, while 99 managed to generate over $100,000, emphasizing the financial hazards of meme tokens promoted by celebrities without meaningful blockchain utility.
Currently, the YZY token’s price has fallen by more than 80% from its peak, trading at $0.5515, with only 19,531 traders holding the token, as reported by the blockchain intelligence platform Nansen.
Andrew Tate, the former kickboxing champion, was among those attempting 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-associated Hyperliquid account, as Cointelegraph reported on Friday.
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Hayden Davis “sniped” YZY token launch for $12 million: Bubblemaps
In the aftermath of the YZY incident, the blockchain data platform flagged Hayden Davies, co-creator of the Official Melania Meme (MELANIA) and the Libra token, as a potential insider.
Davies regained access to his funds on August 21, following a judge’s decision to unfreeze $57.6 million in USDC stablecoins linked to the Libra token scandal, according to Cointelegraph.
“Despite our collective efforts as investigators, builders, and communities – the same names keep running the same scams,” Bubblemaps noted in a Wednesday post on X, adding:
“The next day, Davis (Kelsier) sniped the YZY launch and made $12M.”
“Naseem: A network of snipers tied to Naseem, known for netting $100M on TRUMP, was the first to purchase YZY. These snipers routinely come out on top, earning millions,” the platform further elaborated.
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Despite attracting substantial retail interest, most cryptocurrencies backed by celebrities fail to achieve sustained success and evolve into large-cap tokens.
More than 30 celebrity-backed tokens launched on Solana in June 2024 and have since seen prices drop by at least 73.23%. The celebrities behind these tokens included 50 Cent, Caitlyn Jenner, Iggy Azalea, and soccer superstar Ronaldinho Gaúcho.
Tate also engaged with the Solana memecoin trend on June 7, 2024, endorsing over 10 tokens, the majority of which plummeted by approximately 99% shortly after his endorsement.
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