- YZY surged past $3B in valuation before it dipped to below $1B within hours of launch.
- On-chain data shows insiders accumulated tokens before the public release, making millions.
- Analysts warn the liquidity pool setup and centralization expose retail traders to risks.
Kanye West’s official entry into the crypto market with his Solana-based meme coin, YZY, saw its market valuation briefly flash above $3 billion before a dramatic decline, leaving a trail of red flags for investors.
The token got into the public via West’s verified X account alongside its contract address. The unveiling caused a wave of trading activity that sent volumes surging across Solana decentralized exchanges.
Shortly after launch, YZY saw frenzied buying that drove its fully diluted valuation past $3 billion, only to retrace below $1 billion within hours. At its peak, the token traded above $2 before sliding back near $1.
On-Chain Data Proves Insider Activity
On-chain data shows heavy participation from large wallets with one whale spending 12,170 SOL (about $2.28 million) to acquire 2.67 million YZY. That position is now worth more than $8.29 million, locking in a profit of around $6 million.
Blockchain analytics firms highlighted unusual trading behavior around the launch. Several wallets that acquired YZY before the public announcement booked millions in gains. Also, the six largest holders currently control over 90% of the supply.
In one case, a trader mistakenly bought a fake version of YZY days before the official launch, losing $710,000. The same wallet then purchased the real token for $761,000 and recovered the loss by profiting more than $710,000 in just hours.
Another wallet acquired 1.29 million YZY for $450,611 in USDC and quickly sold most of the position for $1.39 million while still holding tokens worth over $1.5 million. Other early buyers used priority fees to front-run activity on Solana.
Related: Whale Profits $658K on Solana Meme Coins after $5.86M Investment: Here’s How
Serious Liquidity and Centralization Risks
Analysts are warning that YZY’s liquidity pool is structured in a way that puts late retail participants at extreme risk.
YZY’s liquidity pool was supported only with its native token, without USDC or other stable assets, which means the developers can adjust liquidity at any time. Analysts are warning that this setup combined with the concentration of supply puts late retail participants at risk.
Bubblemaps data shows one wallet linked to Yeezy Investments LLC controls 70% of the one billion token supply, with only 20% distributed publicly.
Vague Plans for a “YZY Ecosystem”
Notably, the token is part of the “YZY Money” ecosystem with future products to include YZY Pay, a payment processor aimed at merchants and YZY Card, a debit product for spending YZY and USDC. However, no technical roadmap or launch timeline is available for these features.
Solana Price Reaction
The trading surge around YZY reached Solana itself as it lifted SOL by about 4% to $189 earlier today as traders rushed to participate in the launch.
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Source: https://coinedition.com/red-flags-fly-as-insiders-and-whales-net-8-million-profit-from-kanye-wests-yzy-coin-launch/
