TLDR
- YZY token briefly reached $3 billion market cap on Solana before falling to $1 billion
- Insiders controlled 94% of supply and made millions in profits within hours
- Single-sided liquidity pool allows developers to manipulate prices and exit easily
- One insider made $1.5 million while another trader lost $500,000 in two hours
- Token follows controversial pattern of celebrity memecoins like Trump’s TRUMP token
Rapper Kanye West’s YZY cryptocurrency token experienced a dramatic rise and fall on Thursday, briefly hitting a $3 billion market capitalization before crashing due to insider trading concerns.
West promoted the Solana-based token on his X account, sharing the contract address for Yeezy Money. The website describes YZY as powering a new financial system built on blockchain technology.
The token surged 6,800% within 40 minutes of launch, reaching $3.16 per token. However, blockchain analytics quickly revealed concerning patterns that mirror other celebrity token scandals.
Insider Control Dominates Token Supply
On-chain data shows that insiders controlled 94% of the YZY token supply at launch. One multisig wallet held 87% of all tokens before distributing them to smaller wallets to obscure ownership.
Analytics platform Lookonchain identified wallet 6MNWV8 as having advance knowledge of the contract address. This wallet attempted purchases before launch and later earned over $1.5 million in profits by buying low and selling high.
Another early investor put $2.28 million into YZY tokens and saw holdings reach $8.29 million at peak prices. This represents an unrealized gain of approximately $6 million.
The token uses a problematic single-sided liquidity pool structure. Only YZY tokens were added to the pool without USDC pairing, allowing developers to manipulate pricing by adding or removing liquidity at will.
Heavy Losses for Regular Traders
Not all investors profited from the YZY launch. One wallet spent $1.55 million buying tokens at $1.56 each but sold at $1.06, losing nearly $500,000 in under two hours.
Another trader mistakenly bought the wrong token due to similar contract addresses, initially losing $710,000 before recovering by purchasing correct YZY tokens.
Celebrity Token Pattern Continues
The YZY controversy follows similar issues with other celebrity tokens this year. President Trump’s TRUMP memecoin gained attention after quadrupling in 28 hours, while Argentina’s President Milei faced backlash over the LIBRA token scandal.
Despite concerns, prominent crypto traders including BitMEX co-founder Arthur Hayes bought YZY tokens. Leverage trader James Wynn called it a short-term play, comparing it to Trump’s successful token launch.
The project deployed 25 contract addresses simultaneously, with one randomly selected as official to prevent bot manipulation. However, insider access undermined these anti-sniping measures.
YZY currently trades around $1 per token, down dramatically from its $3+ peak. The token’s website warns users about digital asset risks, including potential complete loss.
