Kanye West's YZY token witnessed a dramatic turn in the crypto market. Reaching a $3 billion market cap, it plummeted by 95% within hours. This incident highlights the high risks associated with memecoins, often controlled by insiders and detrimental to retail investors.
YZY, Kanye West’s token, became the week’s biggest crypto event. With a parabolic surge that catapulted it into the global top 35 with a market cap of $3 billion. This exceptional performance can be attributed to the speculative frenzy surrounding Kanye West’s name. The FOMO effect triggered immediately after its launch on Raydium (Solana) generated massive buying pressure and absorbed millions of dollars in liquidity.
The speed of YZY’s ascent surpassed historical memecoin records. It captured mainstream media attention and temporarily positioned the project as a serious competitor to established memecoins. Fueled by the initial enthusiasm, the perpetual controversy surrounding Kanye West, and the power of celebrity marketing, the project created the perfect cocktail for an unprecedented speculative bubble.
The 95% crash of YZY within hours reveals one of the most blatant manipulations in memecoin history. Conor Grogan’s on-chain analysis shows that 94% of the initial supply was held by insiders, through a multisig wallet controlling up to 87% of the tokens. This extreme concentration allowed insiders to liquidate their positions, triggering a pump and dump strategy that crushed the retail market unable to absorb the selling pressure.
The trading fees exacerbated the situation with a predatory structure: 1% base fees, dynamic adjustments to 2.68%, plus 4-5% slippage, creating a total cost of 10% per transaction. Within hours, this mechanism generated over $9 million for the pool operators. Meanwhile, one whale lost $500,000 in just 120 minutes, illustrating the trap that thousands of investors fell into.
The YZY crash exposes Kanye West’s contradictions, who had previously criticized celebrity coins before launching his own token with a 70% allocation. This hypocrisy illustrates how celebrities exploit their fanbase, reminiscent of previous Solana ecosystem boom-bust cycles like the Trump token and its $27 billion in volume.
For retail investors, YZY becomes a textbook case: Concentrated insiders, predatory fees, marketing promises, and a controversial celebrity. The defensive strategy relies on forensic token analysis and a simple rule: Avoid projects where insiders control more than 50%. The YZY crash could mark a turning point for celebrity coins and push for greater vigilance.
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