Celebrity tokens and other memecoins continue to pose a big threat to investors and the crypto industry at large. Given that these celebrity tokens and memecoins generally have zero utility and add no substantial value to the crypto ecosystem, they often crash as rapidly as they emerge.
Fans and followers prompted to invest in these often zero-value cryptoassets because their favorite celebrity endorsed them are always left rolling in losses. It therefore becomes necessary for investors to approach celebrity tokens with extra caution as the majority of them are pump-and-dump schemes.
The rise and fall of celebrity tokens
A Thursday X post by Slorg shows that roughly 30 Solana-based celebrity tokens were launched in June 2024. These tokens were either created or endorsed by popular figures, including 50 Cent ($GUNIT), Caitlyn Jenner ($JENNER), Andrew Tate ($DADDY), Iggy Azalia ($MOTHER), French Montana ($FRENCH), Jason Derulo ($DERULO), Floyd Mayweather ($FLOYD), Sean Kingston ($KING), Barron Trump ($DJT), Soulja Boy ($SBOY), Hulk Hogan ($HULK), and Davido ($DAVIDO) amongst others.
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Although some of these tokens recorded impressive gains in their early days or launch dates, the prices of all 30 cryptoassets have dropped from their respective all-time highs (ATH) with an average decrease of 94%, per the update.
Of the 30 celebrity tokens launched on Solana in June, 7 have plummeted by over 95% and 15 are down by over 99%, including the Davido-owned token, $DAVIDO. The report also shows that 4 of these celeb tokens have dropped by over 80% while the best-performing 4 are down more than 70% from their ATHs. Only 8 of these tokens currently have their market capitalization above $1M at the time of writing.
While some celebrities still tweet about their affiliated tokens, others have deleted related tweets and a few have denied having a hand. On June 21, Curtis James Jackson III, known as 50 Cent, claimed his X account and website were hacked to promote the pump-and-dump token $GUNIT.
Singer Jason Derulo has also denied selling off his $JASON tokens after its price fell dramatically. On the other hand, Waka Flocka Flame claimed $FLOCKA’s price plummeted because of some insider trading activities.
Read also: Davido Coin and Davido’s Crypto Trail: A Pattern of Pump and Dump?
Crypto community reacts.
Reacting to the latest celebrity-token mania, Slorg, an affiliate of the Solana-based decentralized exchange Jupiter Exchange commented: “It is unknown where these tokens will be in a year from now. The numbers don’t look good, but to be fair this is true of all tokens. Web3 is a fickle beast, and even earnest attempts aren’t always met with success, but this doesn’t excuse the blatant pump and dumps.”
Ethereum co-founder Vitalik Buterin also expressed his displeasure towards celebs for launching tokens only to enrich themselves and early adopters. “Financialization as a means toward an end”, I can respect if the end is worthy (healthcare, open source software, art, etc),” he wrote.
Buterin stressed the need to add utility to tokens to make them sustainable and beneficial to the broader crypto ecosystem. He added that celebrities should only create tokens that have some public good they are serving. He recommended the introduction of decentralized autonomous organizations (DAOs) to celebrity crypto projects to eliminate centralized influence.
“The north star should be: to have a project where even if eventually all tokens involved go to zero, the average person who participated is happy to have done so. Regular businesses and charities accomplish this goal all the time! It’s a low bar, but things we build should meet this bar as well,” Buterin stated. Nonetheless, memecoins or celeb tokens remain high-risk assets that often lead to huge losses for late investors.
Ndianabasi Tom A crypto journalist and content writer who has been talking about cryptocurrency and blockchain technology since 2018, Ndianabasi is a Writer at Crypto Asset Buyer (CAB).
