What to Know
- YZY Coin tanks 56.78% within 10 hours of launch despite hitting $3.4B market cap initially.
- Insider control & hidden fees fuel manipulation concerns, with $9M+ fees collected in hours.
- Celebrity hype vs. utility remains YZY’s biggest test as Yeezy brand enters Web3.
Kanye West has officially entered the crypto chat with the launch of his meme token YZY Coin, but the debut has been anything but smooth. After a six-month delay, the rapper personally endorsed the Solana-based project, sending its market value soaring past $3.4 billion within minutes. However, within 10 hours of launch, the YZY token has plunged 56.78%, according to CoinMarketCap.
The trading volume shot up by an incredible 35,491%, which suggests that people were selling out of fear rather than building up their holdings. Analysts say that three major things are causing this: an unexpected exchange delisting, celebrity token volatility, and a serious lack of liquidity.
YZY Coin Hit by Sudden WEEX Delisting
The first big hit happened at 03:50 UTC on August 21, when WEEX suddenly delisted YZY/USDT. This was just hours before KuCoin’s highly anticipated listing at 06:00 UTC. KuCoin’s addition made the market more liquid, but WEEX’s sudden removal shocked the market.
People often see delistings as warning signs that there may be problems with the project or with the rules. In this case, traders quickly sold their positions because they were worried about losing access to the market. Even though KuCoin has a bigger liquidity pool, the timing of WEEX’s move made bearish sentiment stronger and caused panic selling.
Celebrity Token Volatility
The fact that YZY Coin is directly linked to Kanye West is both its best feature and its biggest risk. Celebrity-backed tokens often go through speculative hype cycles, where the price moves don’t have anything to do with the fundamentals.
Analysts are concerned about structural risks, such as insider allocations and unclear utility, which have dampened excitement. Even though YZY Coin is built on Solana, the price drop shows how weak celebrity tokens are, since they often go through “pump-and-dump” cycles after the initial excitement dies down.
The data shows that YZY Coin had a turnover ratio of 2.84, which means that its market cap changed hands almost three times since its launch. The order books were thin because there were only 299 million tokens in circulation. Buy support was quickly overtaken by large sell orders, which set off a chain reaction of liquidations. The high volume and sharp drop suggest capitulation instead of accumulation, which raises concerns about how long this will last. Amid skepticism, West also unveiled Ye Pay and the YZY Card, promising global crypto payments. Whether these tools gain adoption remains to be seen.
Allegations of Manipulation
Market manipulation and insider trading are even bigger problems than volatility. Reports say that the team and insiders control more than 70% of YZY Coin’s supply, which makes it hard for retail holders to get their hands on it. Coinbase executive Conor Grogan noted that at one point, 94% of tokens were internally held, with 87% under a single multi-sig wallet, leaving little room for genuine community ownership.
On-chain data shows that insiders bought cheap tokens before the official launch and then sold them for millions of dollars in profits. People who study the tokenomics have compared it to the infamous “RUG coin” LIBRA, and there are rumors that the people behind YZY are connected to the same group. The YZY team reportedly collected $9.16 million in fees in just a few hours, which made people even more suspicious. Traders unknowingly paid up to 10% in effective transaction fees because of hidden charges.
Conclusion: Hype vs. Reality
The Yeezy brand, once a global powerhouse in fashion and streetwear, lends cultural weight to YZY Coin. Before they split in 2022, Kanye West used the Yeezy name to make billion-dollar sneaker deals with Adidas. West wants to bring the cultural momentum Yeezy had in fashion to Web3 by linking crypto directly to his Ye brand name.
Meme coins, on the other hand, don’t have any tangible products like sneakers do, so it’s hard to say if they’ll be used in the long term. Whether YZY becomes a way for more people to use Web3 or fades away like another celebrity cash grab will depend on how accessible, how liquid, and how impactful it is in the real world.
