Kanye West’s YZY Token Launch Leaves Traders with Significant Losses
The highly anticipated launch of Kanye West’s YZY token on the Solana blockchain has ended in disaster for many traders, with 105 individuals losing between $100,000 and $1 million each, totaling $26 million in losses. According to data analyzed by Bubblesaps, 70,201 traders interacted with the token, resulting in 51,862 incurring losses.
The token’s market capitalization briefly reached $3 billion before plummeting over 90% within hours, leaving many traders with significant losses. The data reveals a stark inequality in outcomes, with only 11 traders (0.015%) achieving profits of over $1 million, totaling $18.9 million in combined winnings.
Loss Distribution Reveals Severity of Trader Losses
The loss distribution shows that traders with larger positions bore the brunt of the losses. Those who lost between $10,000 and $100,000 accounted for $25.4 million in losses, with 917 traders incurring an average loss of $27,700. Another 4,244 traders lost between $1,000 and $10,000, with an average loss of $3,000, totaling $13 million.
At the extreme end, three traders lost more than $1 million each, resulting in a combined loss of $5.07 million. These losses are a stark reminder of the risks involved in trading cryptocurrencies, particularly in the volatile memecoin market.
Only a Small Fraction of Traders Achieved Considerable Profits
Of the 70,201 traders, only 18,333 (26%) achieved profitability. However, almost 86% of these traders earned profits of up to $1,000, totaling $1.65 million, with an average profit of $105 per trader. Less than 1% (642 traders) earned profits of over $10,000, totaling $58.8 million, which accounts for almost 88% of the total profit.
The structural disadvantages contributing to trader losses include 94% insider-controlled initial offerings and unaffordable fee structures. The YY pool operated with a basic fee of 1%, which quickly adjusted to 2.68%. In combination with slippage costs, this resulted in estimated 10% circular costs for participants.
Market Conditions and Lessons Learned
The YZY token trade data serves as a stark reminder of memecoin market conditions, where considerable profits are often transferred to a small fraction of traders, typically insiders or savvy token scouts. This incident highlights the importance of caution and thorough research when participating in cryptocurrency markets.
For more information on this incident and the cryptocurrency market, visit https://cryptoslate.com/yzy-token-aftermath-sees-105-traders-lose-100k-1m-each-in-75m-wipeout/
