Rapper Kanye West’s newly introduced YZY token on Solana surged to $3 billion in valuation just 40 minutes post-launch, but worries regarding insider sales have significantly impacted a large portion of those gains.
In a Thursday X post, West, who is referred to as Ye, revealed the contract address alongside the Yeezy Money website, which he pitches as “A NEW ECONOMY, BUILT ON CHAIN.”
The website portrays YZY as a currency intended to facilitate transactions within “YZY MONEY,” a ”financial system constructed on crypto rails.”
In a subsequent post, West announced, “the official YZY token just dropped.”
In just 40 minutes, the YZY token achieved a market cap of $3 billion, though it has since decreased to over $1.05 billion at the time of writing, based on data from analytics platform Nansen.
The website’s fine print indicates that the token is not accessible to entities in restricted regions. It also cautions users about the risks linked to digital assets, highlighting a “potential for complete loss.”
A user shared a screenshot showing West’s warning in February about being offered $2 million to promote a fraudulent currency, which would include feigning a hack of his account after endorsing the token.
As of now, West’s net worth is estimated at $400 million, according to Forbes.
Observers point to alleged insider trading
The Yeezy Money website asserts that it implemented 25 contract addresses for the YZY token, with one chosen randomly as the official token to deter token snipers.
Nonetheless, the YZY token launch has triggered concerns regarding insider trading, akin to other celebrity memecoins.
On-chain analytics platform Lookonchain noted that only YZY tokens were deposited into the liquidity pool, indicating that developers could liquidate the tokens at will by modifying the pool’s liquidity.
Conor Grogan, a Coinbase director, highlighted that over 94% of the token supply was controlled by insiders, with a single multisig wallet possessing 87% of it before it was redistributed to multiple wallets.
One individual who supposedly had insider information prior mistakenly purchased the incorrect token, resulting in a loss of $710,000; however, they later recouped their losses by acquiring the correct token, as reported by Lookonchain.
Another user managed to gain $3.4 million and incurred $24,000 in priority fees to the Solana network to expedite his transaction.
Onchain Lens similarly observed that an entity that acquired the token early stood at a profit of $6 million when the token peaked.
Crypto whales, traders are still buying
Despite the issues, several prominent crypto traders have indicated they’ve purchased the token.
Leverage trader James Wynn mentioned that whales will likely be drawn to the token due to its liquidity and trading volume.
Wynn stated it is a short-term strategy, aiming to double or quadruple his investment in the token. He referenced President Donald Trump’s memecoin that saw a fourfold increase in 28 hours as justification for his investment.
“Aped $YZY on a 60% pull back. $TRUMP ran from $4bn to $15bn in 28 hours. 4x” Wynn commented.
BitMEX co-founder Arthur Hayes also seems to have invested in the token.
Celebrity tokens have had a mixed track record
Celebrity memecoins garnered significant attention this year, with Argentina’s President Javier Milei’s endorsement of the LIBRA token considered particularly controversial.
Related: Mixed-martial arts champion Conor McGregor launches token
In February, the Argentine president promoted the LIBRA token on X, triggering a market cap surge to $4 billion; however, he retracted the post within hours after backlash from the community, leading to a significant drop in the token price.
This incident sparked outrage, with many calling for tighter regulations on memecoins endorsed by politicians.
Earlier this year, US President Donald Trump released the TRUMP memecoin ahead of his presidential inauguration.
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