As Unexpected Celebs Like Caitlyn Jenner Dive Into Solana Meme Coins, Early Investors Reap Rewards
Niche celebrities have recently entered the crypto market by launching their own tokens using the Pump Fun application on the Solana blockchain.
Investors who got in early on these celebrity-backed tokens have seen significant profits, with some tokens generating six-figure returns in a short period of time.
The ease of token creation and the subsequent profits have raised concerns and sparked criticism within the crypto community, with some viewing it as a “negative influence” on the industry.
It seems like froth season has arrived once again in the crypto markets as unexpected celebrities jump on the bandwagon of instant meme coin creation.
Well-known personalities such as Caitlyn Jenner, Iggy Azalea, Trippie Redd, and Davido have all launched their own tokens in the past week. They utilized the Pump Fun application, which has gained popularity on Solana by allowing anyone to easily create a coin attached to an image.
However, not everyone has profited from these ventures. Blockchain data indicates that early groups of traders quickly accumulated the majority of the token supply before the celebrities promoted them on their social media profiles. This has resulted in substantial profits for these early buyers in some cases.
For instance, Solana blockchain data revealed that one address bought over 70% of Redd’s BANDO token shortly after its launch. The tokens were then dispersed to 190 other wallet addresses, as discovered by blockchain sleuth ZachXBT.
Nigerian record producer Davido’s DAVIDO token earned early investors a profit of nearly $470,000 worth of Solana’s SOl tokens in just 11 hours, according to on-chain firm Lookonchain. These profits were made from an initial investment of just over $1,000. Lookonchain conducted this analysis by tracking the issuer of the original token, noting how many tokens they acquired after issuance, and monitoring subsequent sales.
ZachXBT highlighted that Davido had previously launched and promoted “multiple scams in the past,” including RapDoge, Echoke, and Racksterli, an investment Ponzi scheme. Data from DEXTools shows that the prices of these tokens plummeted over 99% in the days following their online promotion.
“Their sole interest is to extract $$$ for minimal effort,” ZachXBT stated in a social media post. “A random meme coin shill out of nowhere does the space no good + does not prove they have a genuine interest.”
As of Friday morning, Davido’s social media profile did not respond to a request for clarification regarding these allegations.
According to data tracking firm Bubblemaps, Iggy Azalea’s MOTHER token reportedly generated $2 million in profits for early traders. Bubblemaps revealed that a small number of wallets had purchased 20% of the token supply before Azalea announced its existence on social media. However, the token’s value has since dropped by 70% since Wednesday.
All of these celebrity-promoted tokens were created using the Pump Fun token generator on Solana. Once a certain trading volume is reached, these tokens are automatically listed on the decentralized exchange Raydium.
Data from DEXTools shows that most of these tokens reached market capitalizations of up to $25 million in the hours following their launch, accumulating tens of millions of dollars in trading volumes. However, all of them have experienced more than a 50% drop since their highs, indicating selling pressure amidst the hype.
The first of these celebrity tokens was Jenner’s JENNER meme token, which sparked confusion among market observers due to questions about its legitimacy following previous celebrity social media account compromises.
Despite multiple attempts to reach out to her official media inquiry department, CoinDesk has not yet received confirmation of Jenner’s involvement in the token.
While issuing tokens itself is not inherently harmful, the cryptocurrency community has criticized how these celebrities seemingly appeared out of nowhere and quickly profited from unsuspecting followers. This has led some to view their actions as a “negative influence” in the industry.
Creating meme tokens may appear to be a fun activity from an outsider’s perspective, but developers of such tokens have emphasized that it requires substantial effort to turn them into long-term projects that gain the trust of the community.
“Successful meme coins take a lot of effort: it takes time for the culture, community, and more to develop,” stated a member of the Floki core team in a Telegram interview with CoinDesk. “Even more so if you’re focusing on fundamentals instead of just quick hype, like we try to do at Floki.”
“Many of these celebs are just banking on the hype with a pump and dump cash grab and extracting as much liquidity as possible from their followers,” the team member added.
However, they also noted that there is a correct way for celebrities to issue personalized branded meme tokens. They suggested that celebrities could launch social tokens centered around their brand and products, adding value to the token for holders, rather than engaging in the current trend of launching meme coins and allocating a portion of the supply solely to themselves, only to dump it on unsuspecting followers shortly after.