Kanye West's cryptocurrency 'evaporates'

Kanye West's Memecoin YZY Plunges Within Hours of Launch. Photo: Blockchain Magazine .

Memecoin YZY, endorsed by rapper Kanye West, made a splashy debut on the Solana network, reaching a market cap of $3 billion in just 40 minutes. However, concerns over insider trading and liquidity structure quickly dragged the token’s value much lower.

On social network X on August 22, Kanye West announced the contract address along with the Yeezy Money website, describing it as “a new economy , built on blockchain”. The website said that YZY will play an important role in YZY MONEY, a decentralized financial ecosystem promoted by the rapper himself.

Immediately after the news was shared, YZY's value skyrocketed, reaching a market capitalization of $3 billion , according to data from analytics platform Nansen. However, the token's value dropped sharply after a short period of spike, to around $1.05 billion .

On its official website, YZY has issued multiple risk warnings to users, emphasizing the possibility of “total loss” when investing in crypto assets. The project also said it has deployed 25 contract addresses, one of which is randomly selected to issue the official token, with the aim of curbing memecoin hunting.

However, this implementation was quickly met with skepticism from observers. Investigation platform Lookonchain pointed out that only the YZY token was added to the liquidity pool, giving the developer full control, allowing for easy liquidation when needed.

Conor Grogan, product manager at Coinbase, said that at least 94% of the YZY supply is in the hands of the project development team. A single multi-signature wallet holds 87% of the total supply before it is distributed to many other wallets. This raises concerns about centralization and the risk of price manipulation.

Some unusual transactions were also recorded. According to Lookonchain , a user with insider information mistakenly bought the wrong token and lost $710,000 , but later recouped the loss by buying the correct tokens. Additionally, another user paid $24,000 in priority fees to have a transaction processed early on Solana and earned $3.4 million . Onchain Lens said that a trader made as much as $6 million by selling at the peak of YZY.

Despite the risks, many traders are still in. James Wynn, a prominent leveraged trader, said that crypto whales may be attracted by YZY’s liquidity and high trading volume. Wynn called it a “short-term gamble” and aimed to double or even quadruple their initial investment.

According to Forbes , Kanye West's net worth is currently around $400 million . West previously revealed that he was once offered $2 million to promote a fake token and had to pretend his personal account was hacked to avoid responsibility.

The volatility surrounding YZY highlights the inherent risks of celebrity memecoins. While they offer the potential for big short-term gains, they also pose a risk of total loss for retail investors.

Source: https://znews.vn/token-yzy-cua-kanye-west-boc-hoi-post1579161.html