Author: Nancy, PANews
Half a year later, the renowned rapper Kanye West officially announced the launch of the MEME coin YZY. As market enthusiasm quickly surged, controversies surrounding the control model and potential insider trading have raised significant doubts about this coin issuance.
The team has a high degree of control, and the operational model is similar to the RUG coin LIBRA.
On August 21, Kanye announced the launch of a new brand YZY MONEY on social media and issued the token YZY on Solana. To prove the authenticity of the project, the official also released a video of Kanye himself as endorsement.
According to YZY's tokenomics, 20% is for public issuance, 10% for liquidity pool, 30% allocated to Yeezy Investments LLC (locked for 3 months, linear release over 24 months), 20% allocated to the team (locked for 6 months, linear release over 24 months), and 20% for an ecological development fund (locked for 12 months, linear release over 24 months). This means that more than 70% of the shares are held internally, and the circulation ratio in the public market is limited.
To avoid common front-running attacks, the team pre-deployed 25 contract addresses and ultimately randomly selected one as the official contract. However, there were still users who made mistakes in selecting addresses and incurred losses. For example, according to on-chain analyst Ai Yi's monitoring, a certain address spent $767,000 betting on YZY on August 20 and had to cut losses, losing about $704,000 in 3 hours. Nevertheless, this mechanism seemingly enhanced fairness while also providing ample operational space for internal funds.
Simultaneously, YZY MONEY established partnerships with several popular MEME ecosystem platforms on Solana, including Meteora, Jupiter, and MoonPay, and immediately appeared on Moonshot within 15 minutes of the announcement.
The celebrity effect combined with careful planning quickly ignited the hype for YZY. GMGN market data showed that YZY's market capitalization once exceeded $3.4 billion, but has now fallen below $1 billion, with daily trading volume exceeding $380 million, and its fee income surpassing 2,500 SOL.
However, behind the fervent atmosphere, on-chain data reveals more details of insider operations. According to Lookonchain's monitoring and analysis, currently, only YZY has been added to the liquidity pool, not USDC. Developers can sell YZY by adding/removing liquidity, similar to the MEME coin LIBRA. Multiple insider wallets had funds ready in advance and bought YZY immediately after the announcement. The insider wallet 6MNWV8 knew the contract address in advance and even tried to buy it yesterday; 6MNWV8 spent 450,611 USDC today to purchase 1.29 million YZY at a price of $0.35 and sold 1.04 million YZY for $1.39 million, with the remaining 249,907 YZY (around $600,000), yielding a profit of over $1.5 million; an insider spent 450,000 USDC through two wallets to purchase 1.89 million YZY at $0.24 and then sold 1.59 million YZY for $3.37 million USDC at a price of $2.12. To ensure they could enter first, one wallet even paid a priority fee of 129 SOL (around $24,000).
According to Conor Grogan, a director at Coinbase, at least 94% of the new Kanye tokens are held internally, with 87% previously controlled by a single multi-signature wallet, which has now been dispersed to multiple addresses; about 3% were bought in large amounts by multiple wallets at the opening, and 7% was used for the liquidity pool.
The crypto KOL scooter (@imperooterxbt), who previously revealed the insider information of the LIBRA token, stated that he can be 99% sure Hayden Davis (LIBRA project advisor) was involved in the release of the YZY token because the YZY model is highly similar to LIBRA from a few months ago.
Interestingly, just hours before the YZY news was announced, a U.S. judge had just lifted the freeze on $57.6 million worth of funds from Libra's initiator. Scooter noted that 5 hours after Hayden Davis's funds were unfrozen, YZY was released, which likely is not a coincidence.
To prevent investor lawsuits, YZY even explicitly stated in its official documents a "waiver of class action". The document stated, "To the extent permitted by law, you agree not to bring, join, or participate in any class action lawsuit regarding any claims, disputes, or controversies you may have against any protected party. You agree that the court may take injunctive relief measures to prevent such lawsuits or remove you from the lawsuits. You agree to pay any protected party's attorney fees and litigation costs incurred in seeking such relief."
Additionally, during the issuance 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, with fees lower than the typical 3.5% charged by traditional platforms. Merchants can seamlessly integrate Ye Pay into their websites or applications, providing consumers with a simple and fast checkout experience.
YZY Card is a debit card that can be used globally for YZY and USDC, allowing users to recharge with fiat or cryptocurrencies from any non-custodial wallet, supporting assets like YZY, USDC, USDT, etc. Kanye also supports users to use USDC or YZY (coming soon) to purchase Yeezy brand clothing.
From resolute resistance to flip-flopping attitude, the motivation for issuing coins has sparked controversy.
In fact, as early as February this year, when the MEME market was still in the celebrity token issuance craze driven by Trump, insiders revealed that Kanye West had planned to imitate Trump's TRUMP token model to launch an official Yeezy brand token YZY, expected to be issued on February 21 and usable for payments on its official website.
At the time, it was disclosed that in the token distribution plan, Kanye personally would receive a 70% share, liquidity supply would account for 10%, and investors would account for 20%. This information was reportedly disclosed via email by Yeezy's CFO Hussein Lalani. However, the token issuance plan was ultimately postponed due to issues related to Argentina President Milei's associated token's Rug event.
Subsequently, a large number of tokens named YZY appeared in the MEME market. However, prior to this, Kanye had stated on social media that he received a $2 million proposal to promote a RUG coin MEME token. The party behind it claimed that the collaboration could bring in tens of millions of dollars, but Kanye declined the partnership and emphasized: "I will not issue tokens; I only create products. I only do what I love and understand. I am already very wealthy and have no need to do anything else. Token speculation is deceiving fans, just like the hype surrounding sneaker culture."
However, shortly after, Kanye posted again stating: "All tokens currently are fake; I will launch them next week." He then frequently followed or unfollowed some crypto professionals' accounts, such as CZ and the founder of Polychain Capital, leading to market speculation about his direction for token issuance. However, this tweet was later deleted, and the community once thought Kanye's token launch plan had fallen through, but he was just waiting for the right moment.
Such a flip-flopping attitude has drawn widespread criticism from the crypto community and raised doubts. Some KOLs speculated that Kanye's account might have been sold and listed several abnormal phenomena, such as the system interface switching from dark mode to bright mode and new follows of accounts related to Doginal. However, Kanye denied this and stated that when he truly launches a cryptocurrency project, it will be announced in a formal and clear manner.
A similar attitude was also seen when Kanye participated in the NFT space. As early as 2021, he took part in issuing the NFT for the single (Can U Be/Forever Mitus), but later stated: "Don't make me do NFTs; I focus on real products in the real world, such as food or clothing."
From an early resolute resistance to now personally issuing coins, Kanye's motives and operational methods have pushed the project into a whirlpool of controversy. The final outcome of this carefully packaged capital game may only be revealed with time.
