The launch of Kanye West's YZY token on the Solana blockchain has been met with controversy, as data reveals that a small group of wallets reaped substantial profits while many retail investors suffered losses. According to data from Nansen, 13 wallets made over $24 million by dumping the YZY token shortly after its launch.
The YZY token, launched on Thursday, experienced a meteoric rise, spiking 1,400% within an hour and reaching a peak price of $3. However, this surge was followed by a sharp decline, with the token plummeting 74% in less than 24 hours to around $0.77. This volatility left many investors holding significantly devalued assets.
On-chain analytics firms like Nansen and Lookonchain have identified suspicious trading patterns, suggesting potential insider trading and coordinated manipulation. Lookonchain identified wallets that appeared to have advance knowledge of the YZY contract address, allowing them to purchase tokens before the public sale. One wallet reportedly spent $450,000 USDC to acquire 1.29 million YZY tokens at $0.35 each and then sold a majority of these tokens for $1.39 million within hours.
Further investigation by a pseudonymous blockchain analyst known as Dethective, has linked wallets profiting from the YZY token to a network of addresses involved in the controversial LIBRA token launch earlier this year. According to Dethective, a YZY-linked wallet bought $250,000 worth of tokens at $0.20 each, a price significantly below what most traders paid. Within minutes, this wallet realized over $1 million in profit, which was then transferred to a treasury wallet. This same treasury wallet had previously received funds from "sniper" wallets involved in the LIBRA launch six months prior, where these wallets extracted a combined $21 million. Dethective's analysis suggests that approximately $23 million in total was extracted across the YZY and LIBRA launches, with funds later routed through Kamino or Binance. "We can be sure this is someone with clear inside info," Dethective wrote, adding, "The proof is he did not snipe any coin besides $YZY and $LIBRA and he was prepared with huge size".
Nansen also noted that notorious trader Naseem, who made millions off the TRUMP memecoin, was also among the first to buy YZY. Nansen indicated that the wallet Naseem used had been previously funded by TRUMP profits. While Naseem claimed his gains came from spotting the liquidity pool early, doubts remain about whether his strategy reflects skill or access to privileged information.
The rapid price fluctuations and allegations of insider trading have sparked outrage among investors and raised questions about the fairness and transparency of the YZY token launch. While Kanye West's team claimed to have deployed 25 contract addresses to combat bot sniping, the significant profits made by a select few wallets have fueled skepticism about the token's distribution and purpose.
Nansen tracked trading activity across 62,465 wallets participating in YZY trading, assessing that the top 500 wallets generated $50.4 million in realized profits against $21.4 million in losses. Individual wallet performance showed the largest realized profit reached $3 million, while the largest realized loss totaled $1.3 million. Data from Nansen identified that 9,413 wallets realized profits above $10, compared to 15,999 wallets recording losses exceeding $10.
