Solana
Solana welcomes $Davido coin but party ends quickly as valuation drops overnight
During his third go-around crypto, Afrobeats superstar Davido endorsed and promoted “Timeless Davido,” $DAVIDO, a crypto token – or memecoin, depending on who you ask – on Wednesday night. Although the token’s utility was unclear (use cases appeared to be related to an unknown website and telegram group), it was launched on the Solana blockchain and immediately broke through the noise of others obscure crypto tokens.
“Solana just shipped. Welcome Davido,” Solana’s Twitter account wrote to the superstar on Wednesday evening as $Davido hit a $10 million market cap four hours after its launch. It seemed like the only way to go from there was up, with the Grammy nominee endorsing the piece in several tweets.
The enthusiasm was short-lived. As of Thursday morning, $Davido’s valuation had dropped by 90, and according to the DEX filter, the coin’s liquidity was $291,000 at the time of writing.
This isn’t the singer’s first crypto rodeo. In November 2021, it launched $echoke on the Binance Smart Chain to “provide access to giveaways, NFTs, festivals, exclusive merchandise, and other entertainment, media, and hospitality benefits.” The short-lived project was quickly forgotten.
He also promoted Racksterli, a Ponzi scheme that allegedly defrauded users out of a billion pounds. Youtubee, sparking backlash and arguments for a more responsible use of his star power.
With $Davido, coin holders accept the possibility of having been victims of a rug pull, a phenomenon in which the developers of the project abandon it and take all the invested funds with them.
“Davido does not need this type of negative publicity. The money he made from it is not worth it,” a crypto expert told TechCabal.
Davido’s management did not immediately respond to a request for comment.
Many people who purchased the coin were under no illusions that it was a long-term project, but they expected it to ride the wave and at least rise its valuation, thus allowing its holders to benefit from it. This would have forced developers to resist the temptation to throw a pump and dump on users.
In the world of crypto tokens and meme coins, pump and dump schemes are commonplace and involve a person or group of people artificially inflating the price of a token before selling their tokens at these high prices. That leaves everyone who bought into the hype holding the bag.
Memecoins often experience periods of strong valuation surges before cooling off, but three crypto experts told TechCabal that in many situations, the proponents of these coins structure them so that many ordinary users can also make profits. profits. For the $DAVIDO coin, the creators appeared poised to make profits at the expense of coin holders during the jump.
On Wednesday evening, several prominent crypto handles began raising red flags, claiming that the wallet that created the token sold a significant amount and took in $200,000 in a matter of hours.
“It’s obviously a pump and dump system. The wallet that launched the token is traceable and was throwing it live while Davido was tweeting about it,” a crypto trader who asked not to be named told TechCabal.
Another coin analysis claimed that the coin’s creators raised around $500,000 in just under 24 hours, driving up the coin’s price and leaving users holding the bag.