Kanye West’s highly publicized memecoin, $YZY, has left thousands of investors with substantial losses following a brief initial surge that was followed by a sudden decline in value.
It launched on the Solana blockchain on August 21st and surged over 1,400% in its first hour of trading, according to UnoCrypto.
However, the mania was short-lived as the price of the token fell more than 80%, wiping profits for most holders.
Blockchain analytics firm Bubblemaps reports that among 70,200 participants in the launch, more than 51,862 wallets lost money with the total amount being $74.8 million.
A Few Winners Amid Widespread Losses
While most of the investors were left grief-stricken, a privileged few pocketed huge profits.
According to Bubblemaps, there were only 11 wallets that have profited more than $1 million each, and only 99 wallets that have profited more than $100,000 each.
The divide between the two numbers is representative of the predatory nature of celebrity tokens, where insiders and early purchasers will seize the largest portion of the economic upside on these types of projects.
The YZY token is currently worth $0.5515, down more than 80% from its all-time high. According to blockchain data portal Nansen, it has only 19,531 active holders.
High-Profile Victims: Andrew Tate Among Them
The fall of YZY had its repercussions, even hitting high-profile victims like Andrew Tate, a former kickboxing champion.
Tate had apparently attempted to profit from the token’s volatility by creating a 3x leveraged short on YZY, UnoCrypto reported.
The trade failed him for bad luck, as he ended up with a massive $700,000 loss in his Hyperliquid account.
The action comes at a time when rumors have been rife for ages that celebrities and influencers have attempted to profit from tokens driven by volatility without fully accounting for their inherent volatility.
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Insider Profits and Market Manipulation
Controversy arose regarding insider trade activity in the $YZY debut. Dethective called out Hayden Davies, who created the Official Melania Meme (MELANIA) and the notoriety-accruing LIBRA token, as a beneficiary.
Davies was reported to have “sniped” the YZY launch, reaping $12 million in profits only a day after he regained access to $57.6 million in USDC stablecoins that had been locked due to previous legal disputes.
They also linked the launch with a sniping network belonging to an entity known as Naseem that came into infamy for reaping $100 million from the TRUMP token.
These findings also raise further questions about the fairness and transparency of celebrity-endorsed token issuances.
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Risks of Celebrity-Endorsed Tokens
The YZY debacle is not an outlier, but rather an increasing trend among celebrity-backed memecoins that fail soon after going live.
Over 30 celebrity tokens were listed on Solana in June 2024, including those endorsed by 50 Cent, Caitlyn Jenner, Iggy Azalea, and football legend Ronaldinho Gaúcho.
Nearly all of them dipped by at least 73.23%, and some lost as much as 99%. Even Andrew Tate himself once promoted over 10 Solana-based memecoins, most of which lost nearly all their value.
The collapse of Kanye West’s YZY token once again highlights how celebrity endorsements can create short-lived hype for projects that promise upside to many but leave average traders vulnerable to potential disastrous losses.
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