Blockchain data is raising questions about the “for the people” launch story of memecoin Pepe, with new analysis indicating that nearly one-third of the initial supply was controlled by a single entity, contributing to significant early selling pressure.
Approximately 30% of the Pepe (PEPE) token supply was aggregated at launch in April 2023, according to blockchain data visualization platform Bubblemaps, which reported on Wednesday, asserting that investors were “misled.”
The same wallet cluster liquidated $2 million worth of PEPE tokens the day after the launch, adding considerable sell pressure that prevented the token from exceeding the $12 billion mark, as noted by Bubblemaps.
This concentration of the initial supply is at odds with Pepe’s original branding as a “coin for the people.” The project’s website claimed the token launched “in stealth” without any presale allocations.
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PEPE’s price declined by 5.7% in the past 24 hours, and it has dropped over 81% over the past year, as per CoinMarketCap data.
Cointelegraph was unable to reach the PEPE team for comment.
Adding to investor concerns, Pepe’s website was compromised earlier in December, briefly redirecting users to a malicious inferno drainer, a scam tool used for phishing attacks, wallet drains, and social engineering scams.
Despite PEPE’s downturn, some crypto traders have managed to make millions from the memecoin.
In March, one trader transformed an initial investment of $2,000 into $43 million by holding PEPE. The trader realized a $10 million profit on their position, having endured a 74% drop from PEPE’s all-time high before selling.
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Forensics tool targets insider-heavy launches
The latest findings were uncovered through Bubblemaps’ Time Travel feature, a forensic-grade analytics tool launched in May that allows Web3 users to reconstruct the historical distribution of tokens, aimed at identifying early insider activity or coordinated accumulation efforts to avert rug pulls and memecoin scams.
Identifying tokens with a large portion of the supply concentrated in a few wallets can assist investors in detecting scams such as rug pulls, where insiders remove liquidity or orchestrate a mass sell-off, resulting in a sharp price drop that leaves investors with worthless tokens.
Bubblemaps has played a crucial role in uncovering suspicious wallet activity connected to various memecoins, including the Melania token and a number of fraudulent Eric Trump-themed memecoins.
In one of this year’s most damaging rug pulls, the Wolf of Wall Street-themed WOLF token plummeted by 99% within a few hours, erasing nearly $42 million in market capitalization on March 16.
The token was created by Hayden Davis, the co-creator of the Official Melania Meme (MELANIA) and the Libra token.
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