Celebrity memecoins on Solana have become a dime a dozen this cycle, but data shows investors hardly see returns.
Some 30 celebrity memecoins launched on Solana (SOL) last month as popular figures capitalized on the speculative investment culture gripping one of crypto’s largest ecosystems.
Memecoins are a play on popular culture, combining funny images and social media themes with decentralized tokenomics to issue hype-driven cryptocurrencies. Celebrities like Andrew Tate, Caitlyn Jenner, Davido, Iggy Azalea, Jason Derulo, and 50 Cent have indulged in the celebrity meme meta. Public status has done little to ensure success in the web3 world.
A Jupiter exchange team member said meme tokens backed by celebrities showed an average decline of 94%. Half the coins are down 99% from the highs within 30 days of launch. Tokens from Tate, Jenner, and Azalea have fared best, with declines within the 70-80% range.
Insiders profit the most from memecoins
Memecoins are extremely volatile by nature, even for cryptocurrencies. The possibility of quadrupling the price within hours and falling below listing levels underscores the risk associated with these tokens.
Yet another layer exists to the steady decline pattern noticed with memecoins. According to Bubblemaps, data showed a network of insider wallets controlled huge supply portions. Insiders could be anyone from celebrities themselves to team members and developers working on the project. Anyone behind the scenes with prior knowledge of the launch is an insider.
Bubblemaps noted that insiders owned anywhere from 20% to 90% of celebrity memecoin supplies for tokens launched in June. Insiders likely sold at high prices and profited the most from these celebrity launches.
Solana co-founder Raj Gokal described meme tokens as an intuitive way to attract retail investors at Consensus 2024. Industry veterans like Andre Cronje and Vitalik Buterin have spoken out against meme tokens without utility or end goal. Nevertheless, coins fueled by memetic culture don’t seem to be going anywhere.
