On-chain data reveals a massive profit-taking event following the launch of Kanye West’s YZY memecoin on Solana, raising serious questions about insider access and fairness for retail investors.
Key Takeaways
- Thirteen wallets collectively profited over $24 million by selling YZY tokens shortly after launch .
- The YZY token, launched by Kanye West (Ye) on the Solana blockchain, briefly achieved a market capitalization of $3 billion .
- Despite anti-sniping mechanisms and a vesting schedule using Jupiter Lock, early price action suggests insider advantage .
- The token’s price crashed significantly, down over 70% from its peak, leading to substantial losses for late-joining retail investors .
- On-chain analysts, including Dethective, have linked wallets responsible for millions in profits to suspected insider trading activities .
The launch of YZY, the memecoin associated with rapper Kanye West (now known as Ye), was an immediate spectacle, with its market capitalization soaring to an estimated $3 billion within the first few minutes of trading . Ye confirmed the launch via a video posted to his X account, declaring, “The official Yeezy token just dropped” . The token, built on the Solana blockchain, was promoted as part of a broader “Yeezy Money” ecosystem .
However, the initial hype quickly gave way to scrutiny. Data from analytics firm Nansen shows that the YZY token spiked 1,400% to a peak of $3 before beginning its descent . In the midst of this volatility, a clear pattern emerged: a small group of early participants reaped enormous gains. Reports confirm that 13 wallets made over $24 million in profit by selling, or “dumping,” their YZY holdings . This coordinated selling has been described as a “cash grab for insiders” .
The token’s design included features intended to promote fairness, such as anti-sniping mechanisms and a structured vesting schedule utilizing the Jupiter Lock protocol . The total supply distribution allocated 70% to Yeezy Investments LLC, 20% for public allocation, and 10% for liquidity, with the majority of the supply locked for 24 months . Despite these measures, the rapid extraction of capital by a select few suggests the system may have been gamed. On-chain sleuth Dethective identified specific “sniper” wallets that were active in both the YZY and LIBRA token launches, amassing nearly $23 million in profits, which points to pre-launch knowledge and insider trading .
The consequences for retail investors were severe. As the price plummeted they were falling 74% in less than 24 hours , thousands of wallets were left with significant losses . The biggest individual loss identified by Nansen was $1.8 million . This pattern mirrors concerns seen with other celebrity memecoins, where the initial frenzy often benefits early insiders at the expense of the general public. While the YZY launch generated immense buzz, the aftermath underscores the high risks and potential for disintermediation in the largely unregulated memecoin market. Investors are advised to conduct thorough due diligence and be wary of tokens driven primarily by celebrity association rather than fundamental utility.
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