American popular rapper Kanye West’s new crypto project, the YZY token, launched this week on the Solana blockchain, has dropped sharply. The token recorded an explosive activity with its market capitalization soaring close to $3 billion within hours. This was fueled by a frenzy of trading on decentralized exchange Raydium.
However, the rally was short-lived. The token price dropped by more than 90% in just one day, cutting its market value down to about $137 million. This sharp fall looked very similar to past events in Solana’s memecoin space, where coins linked to hype or celebrities rise quickly and then crash just as fast.
Blockchain data showed a worrying concentration of ownership. Reports suggested that 94% of YZY’s first supply was held by insiders, with one multisig wallet alone holding 87% of the tokens at launch. Even though the tokens were later spread out, this early imbalance led to strong criticism, as many felt that small traders had little chance to benefit.
The issue became bigger when it was revealed that West himself was expected to keep 70% of the supply, despite his earlier claims that celebrity tokens take advantage of fans.
To make matters worse, YZY’s trading pools came with very high fees, which added to investor losses. A 1% base fee was built into trades, but dynamic adjustments pushed that to nearly 2.7%, while slippage introduced another 4–5%.
Traders faced an estimated 10% cost just to enter and exit positions. Even with these costs, volume in the first hours was strong, generating over $9 million in fees for pool operators. Many small traders, however, were left with steep losses.
The volatility hit even large players. Blockchain tracker Lookonchain reported one whale spent 1.55 million USDC to buy nearly one million YZY tokens at $1.56. Just two hours later, the same wallet was sold at $1.06, walking away with a $500,000 loss.
Similar trades repeated across Raydium, as prices plunged to near $1. Some wallets lost big in minutes, while insiders who sold early walked away with major profits.
The YZY launch underscored both the appeal and risks of Solana’s memecoin economy. Earlier this year, during the Trump token frenzy, Solana decentralized exchanges processed $27 billion in daily volume.
YZY briefly fueled another surge in activity, but its collapse followed the same boom-and-bust cycle that has come to define this space. In December 2024, influencer Haliey Welch launched the HAWK memecoin on the Solana network.
It registered a market cap near $500 million before plummeting to just $25 million, a 95% drop in moments. The incident sparked SEC scrutiny and a lawsuit, with accusations of pump-and-dump and insider trading.
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By TheCoinrise
about 3 hours ago
