By Nancy, PANews
Six months after the announcement, the famous rapper Kanye West finally officially announced the launch of the MEME coin YZY. While the market enthusiasm has rapidly increased, the controversy surrounding the control model and potential insider trading has also made this coin issuance move subject to much doubt.
The team has a high degree of control, and the operating model is similar to the RUG coin LIBRA
On August 21st, Kanye West announced the launch of his new brand, YZY MONEY, on social media and issued the YZY token on Solana. To verify the project’s authenticity, the official release included a video of Kanye West himself appearing abroad as endorsement.
According to YZY’s token economics, 20% will be used for public issuance, 10% for the liquidity pool, 30% will be allocated to Yeezy Investments LLC (locked for 3 months, with a linear release over 24 months), 20% will be allocated to the team (locked for 6 months, with a linear release over 24 months), and 20% will be used for the ecosystem development fund (locked for 12 months, with a linear release over 24 months). This means that at least 70% of the shares are held internally, with limited circulation in the public market.
To prevent common front-running attacks, the team pre-deployed 25 contract addresses and randomly selected one as the live contract. However, some users still lose money by front-running and selecting the wrong address. For example, according to on-chain analyst Ai Yi, an address that bet $767,000 on YZY on August 20th has sold its position, resulting in a loss of approximately $704,000 in three hours. However, this mechanism appears to enhance fairness while also leaving ample room for internal funds to operate.
At the same time, YZY MONEY has established cooperation with several popular MEME ecosystem-related platforms of Solana, including Meteora, Jupiter and MoonPay, and was listed on Moonshot less than 15 minutes after the official announcement.
The combination of star power and meticulous planning quickly ignited YZY’s popularity. GMGN market data shows that YZY’s market capitalization once exceeded $3.4 billion, but has now fallen below $1 billion. Its intraday trading volume exceeded $380 million, and its transaction fee income has exceeded 2,500 SOL.
However, beneath the frenzy, on-chain data reveals further details of insider trading. Lookonchain monitoring and analysis show that only YZY has been added to the liquidity pool, not USDC. Developers can sell YZY by adding or removing liquidity, similar to the MEME coin LIBRA. Multiple insider wallets prepared funds in advance and immediately bought YZY after the announcement. Insider wallet 6MNWV8 knew the contract address in advance and even attempted to purchase it yesterday. Today, 6MNWV8 spent 450,611 USDC to purchase 1.29 million YZY at $0.35 and sold 1.04 million YZY at $1.39 million, leaving 249,907 YZY (approximately $600,000), a profit of over $1.5 million. An insider, using two wallets, spent 450,000 USDC to purchase 1.89 million YZY at $0.24, then sold 1.59 million YZY at $2.12 for 3.37 million USDC. One wallet even paid a 129 SOL ($24,000 USD) priority fee to ensure it would be first in.
According to Coinbase director Conor Grogan, at least 94% of the new Kanye tokens are held internally, of which 87% were once controlled by a single multi-signature wallet and are now dispersed across multiple addresses; about 3% were purchased in large quantities by multiple wallets at the opening, and 7% were used in liquidity pools.
Scooter (@imperooterxbt), a crypto KOL who was involved in exposing the inside story of the LIBRA token, posted that it is 99% certain that Hayden Davis (LIBRA project consultant) was involved in the release of the YZY token because the YZY model is highly similar to the LIBRA a few months ago.
Even more intriguing is that just hours before the YZY announcement, a US judge lifted a freeze on $57.6 million in funds held by Libra’s founders. Scooter commented that the YZY announcement, five hours after Hayden Davis’s funds were unfrozen, is likely no coincidence.
To prevent investor lawsuits, YZY even explicitly states a “class action waiver” in its official documents. The document states, “To the extent permitted by law, you agree not to initiate, join, or participate in any class action lawsuit with respect to any claim, dispute, or controversy you may have against any Indemnified Party. You agree that a court may award injunctive relief to prevent such action or remove you from the action. You agree to pay any attorneys’ fees and litigation costs incurred by any Indemnified Party in seeking such relief.”
In addition, during the release of YZY, Kanye also launched two independent projects, Ye Pay and YZY Card.
Ye Pay is a crypto payment processor that allows merchants to accept credit card and cryptocurrency payments at a lower fee than the 3.5% typically charged by traditional platforms. Merchants can seamlessly integrate Ye Pay into their website or app, providing consumers with a simple and fast checkout experience.
YZY Card is a debit card that supports YZY and USDC globally. Users can top up the card with any fiat or cryptocurrency from any non-custodial wallet, supporting assets such as YZY, USDC, and USDT. Kanye also supports users purchasing Yeezy apparel using USDC or YZY (coming soon).
From resolute resistance to fluctuating attitudes, the motives for issuing coins have caused controversy
In fact, as early as February this year, when the MEME market was still in the midst of a celebrity coin issuance craze driven by Trump, insiders revealed that Kanye West had planned to emulate Trump’s TRUMP token model and launch the Yeezy brand official token YZY, which was expected to be issued on February 21 and could be used for payment on its official website.
According to the token distribution plan disclosed at the time, Kanye would personally receive 70%, liquidity providers would receive 10%, and investors would receive 20%. This information was allegedly disclosed by Yeezy CFO Hussein Lalani via email. However, the token issuance plan was ultimately postponed due to the Rug incident involving Argentinian President Milei’s tokens.
Subsequently, a large number of tokens with the same name, YZY, appeared in the MEME market. However, prior to this, Kanye West had stated on social media that he had received a $2 million proposal to promote a MEME coin called RUG. The party behind the proposal claimed that the collaboration could generate tens of millions of dollars in revenue, but Kanye West declined, emphasizing, “I will not issue tokens. I only make products, and I only do what I love and understand. I am already rich, and there is no need to do anything else. Token hype is deceiving fans, just like the hyped sneaker culture.”
However, shortly after, Kanye West posted again, stating, “All current tokens are fake. I will launch next week.” He subsequently frequently followed and unfollowed accounts of crypto professionals, such as CZ and the founder of Polychain Capital, sparking market speculation about the direction of his coin launch. However, the tweet was subsequently deleted, and the community initially believed Kanye West’s coin launch plan had fallen through, but it turned out he was biding his time.
This volatile stance has drawn widespread criticism and raised questions within the crypto community. Some influencers speculated that Kanye’s account may have been sold, citing several unusual phenomena: the system interface switching from dark to light mode and the addition of Doginal-related accounts to his following. However, Kanye denied these claims, stating that when he actually launches a cryptocurrency project, he will make a formal and clear announcement.
A similar attitude has also appeared in Kanye West’s involvement in the NFT field. As early as 2021, he participated in the release of the NFT of the single “Can U Be/Forever Mitus”, but later stated: “Don’t ask me to do NFTs. I focus on real products in the real world, such as food or clothing.”
From the early resolute resistance to the current personal issuance of coins, Kanye’s motives and operating methods have pushed the project into a vortex of controversy. The final direction of this carefully packaged capital game may only be revealed by time.