Solana Meme Coin Presales Have Raised $150 Million—What Could Go Wrong?

Some members of the Solana neighborhood have begun vocally pushing again in opposition to meme coin presales—an more and more frequent, doubtful observe that has seen crypto merchants blindly ship tens of thousands and thousands of {dollars} to strangers within the hopes of getting in early on the following BONK, WIF, or BOME.

Amid the multi-billion greenback explosions of a number of Solana-based meme cash within the final three months—a phenomenon that has helped rocket the blockchain again to prominence—quite a few crypto influencers have begun making the most of the frenzied FOMO ambiance by promising early, discounted allocations of sure meme cash earlier than launch to merchants that ship SOL to the promoters’ wallets. 

When crypto customers ship funds to such wallets, there isn’t any assure that they may obtain something in return. There’s usually no technique to be sure that the individual requesting the funds is an precise dev—or that there’s even an actual meme coin launching on the horizon. 

Regardless of the unbelievable lack of accountability posed by meme coin presales, nonetheless, crypto customers have thrown an astounding sum of money at them: nearly $150 million in simply the final week, in line with pseudonymous on-chain sleuth ZachXBT—and that’s simply on Solana.

Since March 12, per the analyst, Solana customers have despatched 796,000 SOL—price some $149.2 million at writing—to only 33 meme coin presale addresses marketed on Twitter. A number of such presales have turned out to be full-on scams. 

In response to ZachXBT’s findings, Solana customers expressed frustration with the ballooning prevalence of meme coin presales on the chain—and posed theories as to what’s behind the extremely questionable observe.

“Cease doing this,” Solana co-founder Anatoly Yakovenko bluntly chided Solana DeFi customers in response to ZachXBT’s findings. 

Others warned that the phenomenon may create lasting damaging results extending past these concerned within the presale schemes. 

“I do not see how this would possibly not find yourself having extreme penalties on the DeFi area as an entire,” crypto influencer Pennski wrote on Twitter Tuesday. “There isn’t any approach [the] SEC simply sits again and permits it to proceed.”

That allusion to potential authorized ramifications for DeFi sparked by presale shenanigans—right here by the hands of the U.S. Securities and Change Fee (SEC)—echoed fears about different authorized uncertainties which have cropped up for quite a few meme coin presales.

In a situation that has turn out to be all too frequent for the reason that proliferation of presales, a Solana-based developer raised over $30 million price of SOL in minutes yesterday for a yet-to-be-launched meme coin, just for inquiries to come up when the dev started transferring these funds on to Binance and buying and selling them for stablecoins. 

A number of crypto customers identified that—whatever the developer’s intentions—the mere act of changing tens of thousands and thousands of {dollars} price of 1 cryptocurrency into one other through a centralized alternate like Binance nearly definitely uncovered the undertaking to a tax-filing nightmare. 

Others have additionally questioned the backgrounds of a number of meme coin presellers popping up on Solana, who seem to have much more expertise hyping NFTs on Ethereum, than they do creating Solana-native DeFi tasks. 

However for now, regardless of all of the potential crimson flags—fraud-wise, risk-wise, and legally—the development of meme coin presales continues unabated. After posting detailed evaluation on the topic early Tuesday, ZachXBT needed to replace his findings simply hours later: DeFi customers had thrown one other $27 million at Solana presales that he’d missed.

Edited by Andrew Hayward