The developer of Solana-based memecoin Neiro has profited $2.85 million in an apparent rug pull.
The $2.85 million profit represents a 5,169x return on their initial investment of just 3 SOL (SOL), worth over $550.
The developer initially invested in the memecoin when deploying the token contract, according to a July 28 X post by Lookonchain:
“He sold 68M $Neiro for 15,511 $SOL($2.85M) through multiple wallets, with a realized profit of 15,508 $SOL($2.85M). He also sent 10M $Neiro to the dead wallet, leaving 19.5M $Neiro($1.8M), with an unrealized profit of $1.8M!”
The developer wallet selling its holdings could be a sign of a potential rug pull, crypto slang for an exit scam that involves insiders quietly selling a large part of their token allocation and exiting the project.
Related: Record $39.4B Bitcoin open interest suggests imminent price breakout
Memecoin season could be just around the corner
Meanwhile the wider memecoin sector could be on track to witness the next phase of the bull cycle, according to popular memecoin trader Zack Ventura.
The trader wrote in a July 22 X post:
“This index is the top memecoins against Bitcoin, tracing back from December 2023. Next leg up memecoin season is loading.”
While memecoins don’t always move holistically as an asset class, some tokens are still soaring to new all-time highs.
The Solana-based Dogwifhat (WIF) hit a new monthly high on July 18, after an over 41% weekly rally brought it back in the top 50 largest cryptocurrencies by market capitalization.
Related: Vitalik Buterin slams celebrity memecoins
Are memecoins hurting the legitimacy of the crypto industry?
The current cycle has seen the debut of numerous celebrity-launched memecoins. While some see these as a sign of mainstream adoption, the notoriously poor price performance of these celebrity tokens may be damaging the industry’s reputation.
The majority of celebrity-backed memecoins fell at least 66% within the first week of their launch, including JENNER, DAVIDO and RICH.
American singer Jason Derulo’s JASON token was also hit with controversy at the end of June when analytics firm Bubblemaps claimed that the singer sold thousands of dollars worth of the token despite claims that he “WILL NEVER SELL.”
The Daddy Tate (DADDY) memecoin, launched by controversial former kickboxing champion Andrew Tate, was also hit by insider trading allegations, with Bubblemaps writing in a June 12 X post:
“Insiders bought 30% of the supply at launch before Andrew Tate started to promote it on X.”
Magazine: Trump’s Bitcoin push, spot Ether ETF debut, and more: Hodlers Digest, July 21-27
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