Solana’s memecoins have become extremely popular during this cycle, but data shows that investors are seeing little returns.
About 30 celebrity-themed meme coins have been launched on Solana (SOL) in the past month as popular figures cash in on the speculative investment culture sweeping one of the largest cryptocurrency ecosystems.
Memecoins are a play on popular culture, combining memes and social media topics with decentralized economic tokens to issue hype-driven cryptocurrencies. Celebrities like Andrew Tate, Caitlyn Jenner, Davido, Iggy Azalea, Jason Derulo, and 50 Cent have all gotten involved in the celebrity meme game. Public status has done little to ensure success in the Web 3.0 world.
A member of the Jupiter Exchange team said that celebrity-backed meme tokens showed an average drop Half of the coins have fallen 99% from their highs in the 30 days since launch. The best performers were Tate, Jenner, and Azalea tokens, which fell in the 70-80% range.
Insiders benefit the most from memecoins
Memecoins are inherently highly volatile, even for a cryptocurrency. The potential for the price to quadruple in a matter of hours and fall below listing levels underscores the risks associated with these tokens.
There is another layer to the ongoing downward trend seen with memecoins. According to Bubblemaps, the data shows that a network of insider wallets control huge chunks of the supply. Insiders can 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 notes that insiders own between 20% and 90% of the celebrity memecoin supply for the tokens launched in June. Insiders likely sold at high prices and profited more from these celebrity launches.
At the Consensus 2024 conference, Solana co-founder Raj Gokal described meme tokens as a no-brainer way to attract retail investors. Industry veterans like Andre Cronje and Vitalik Buterin have spoken out against meme tokens that have no purpose or end goal. However, it seems that coins fueled by meme culture are not going anywhere.
