Some members of the Solana community have begun vocally pushing back against meme coin presales—an increasingly common, dubious practice that has seen crypto traders blindly send tens of millions of dollars to strangers in the hopes of getting in early on the next BONK, WIF, or BOME.
Amid the multi-billion dollar explosions of several Solana-based meme coins in the last three months—a phenomenon that has helped rocket the blockchain back to prominence—numerous crypto influencers have begun taking advantage of the frenzied FOMO atmosphere by promising early, discounted allocations of certain meme coins before launch to traders that send SOL to the promoters’ wallets.
When crypto users send funds to such wallets, there is no guarantee that they will receive anything in return. There’s often no way to make sure that the person requesting the funds is an actual dev—or that there’s even a real meme coin launching on the horizon.
Despite the incredible lack of accountability posed by meme coin presales, however, crypto users have thrown an astounding amount of money at them: almost $150 million in just the last week, according to pseudonymous on-chain sleuth ZachXBT—and that’s just on Solana.
Since March 12, per the analyst, Solana users have sent 796,000 SOL—worth some $149.2 million at writing—to just 33 meme coin presale addresses advertised on Twitter. Several such presales have turned out to be full-on scams.
In response to ZachXBT’s findings, Solana users expressed frustration with the ballooning prevalence of meme coin presales on the chain—and posed theories as to what’s behind the highly questionable practice.
“Stop doing this,” Solana co-founder Anatoly Yakovenko bluntly chided Solana DeFi users in response to ZachXBT’s findings.
Slerf’s presale tweet that yielded $10 million in interest. Image: Twitter/X
Others warned that the phenomenon could create lasting negative effects extending beyond those involved in the presale schemes.
“I don’t see how this won’t end up having severe consequences on the DeFi space as a whole,” crypto influencer Pennski wrote on Twitter Tuesday. “There’s no way [the] SEC just sits back and allows it to continue.”
That allusion to potential legal ramifications for DeFi sparked by presale shenanigans—here at the hands of the U.S. Securities and Exchange Commission (SEC)—echoed fears about other legal uncertainties that have cropped up for numerous meme coin presales.
In a scenario that has become all too common since the proliferation of presales, a Solana-based developer raised over $30 million worth of SOL in minutes yesterday for a yet-to-be-launched meme coin, only for questions to arise when the dev began moving those funds on to Binance and trading them for stablecoins.
Several crypto users pointed out that—regardless of the developer’s intentions—the mere act of converting tens of millions of dollars worth of one cryptocurrency into another via a centralized exchange like Binance almost certainly exposed the project to a tax-filing nightmare.
Besides the fact it is a taxable event for you lmfao
— CR1337 (@cryptonator1337) March 19, 2024
Others have also questioned the backgrounds of several meme coin presellers popping up on Solana, who appear to have far more experience hyping NFTs on Ethereum, than they do developing Solana-native DeFi projects.
But for now, in spite of all the potential red flags—fraud-wise, risk-wise, and legally—the trend of meme coin presales continues unabated. After posting detailed analysis on the subject early Tuesday, ZachXBT had to update his findings just hours later: DeFi users had thrown another $27 million at Solana presales that he’d missed.
Edited by Andrew Hayward
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Source: https://decrypt.co/222417/solana-meme-coin-presales-150-million-what-could-go-wrong
