Blockchain data is challenging the “for the people” narrative surrounding the launch of memecoin Pepe, with new analysis indicating that nearly a third of the initial supply was controlled by a single entity, resulting in significant early selling pressure.
Approximately 30% of the Pepe (PEPE) token supply was grouped at launch in April 2023, as reported by blockchain data visualization platform Bubblemaps on Wednesday, adding that investors were “misled.”
The same wallet cluster sold $2 million worth of PEPE tokens the day after launch, generating considerable sell pressure that kept the token from exceeding the $12 billion mark, according to Bubblemaps.
The concentration of the genesis supply contrasts sharply with Pepe’s initial branding as a “coin for the people.” The project’s website stated that the token launched “in stealth” with no presale allocations.
Related: Silk Road-linked Bitcoin wallets move $3M to new address
PEPE’s price has decreased by 5.7% in the past 24 hours and is down more than 81% over the past year, according to CoinMarketCap data.
Cointelegraph reached out to the team behind PEPE for comment but did not receive a response.
Further complicating investor sentiment, Pepe’s website was compromised in early December, temporarily redirecting users to a malicious inferno drainer, a tool used for phishing attacks, wallet thefts, and social engineering scams.
Despite PEPE’s drop in value, some crypto traders have managed to earn millions from the memecoin.
In March, one trader transformed an initial $2,000 investment into $43 million by holding PEPE. The trader realized a $10 million profit on his position, maintaining it through a 74% decline from PEPE’s all-time high before selling.
Related: Crypto nears its ‘Netscape moment’ as industry approaches inflection point
Forensics tool targets insider-heavy launches
The recent findings were revealed through Bubblemaps’ Time Travel feature, a forensic-grade analytics tool launched in May that allows Web3 users to trace the historical distribution of tokens, aiming to uncover early insider activity or coordinated accumulation efforts to avoid rug pulls and memecoin scams.
Identifying tokens with a significant portion of the supply concentrated in a few wallets can help investors recognize scams like rug pulls, where insiders withdraw liquidity or execute a large-scale sell-off, leading to a steep price drop that leaves investors holding worthless tokens.
Bubblemaps has been instrumental in exposing suspicious wallet behavior linked to multiple memecoins, including the Melania token and various fake Eric Trump-themed tokens.
In one of the most severe rug pulls this year, the WOLF token, inspired by the Wolf of Wall Street, plummeted 99% within just a few hours, erasing nearly $42 million in market capitalization on March 16.
The token was created by Hayden Davis, co-creator of the Official Melania Meme (MELANIA) and the Libra token.
Magazine: Memecoin degeneracy is funding groundbreaking anti-aging research
