Davido Faces Criticism Over Rapid Memecoin Profits

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As a researcher with a background in crypto economics, I find the rapid profit-making by Afro-pop star Davido from his newly launched DAVIDO memecoin quite intriguing. However, I am deeply concerned about the potential repercussions of such actions for the Nigerian crypto community and the wider industry as a whole.

The Afro-pop musician Davido has faced criticism from Nigeria’s crypto community after making a substantial profit from his newly launched memecoin, DAVIDO, in a short time frame. Within just 11 hours of its launch on May 29, the token generated Davido a profit of approximately $473,000 or 2,783 SOL.

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According to blockchain tracking firm Lookonchain, I (Davido) received an initial investment of 7.5 SOL. Subsequently, I utilized 7 SOL from that amount to introduce and initiate the DAVIDO token on the pump.fun platform.

Eleven hours ago, Davido (@davido) introduced a token named $DAVIDO and earned a revenue of approximately $473,000 in profits, along with an additional potential profit of $207,000. Initially, he was given a starting investment of 7.5 $SOL ($1,275) to launch the token on the platform and spent 7 $SOL ($1,190) for related expenses.— Lookonchain (@lookonchain) May 30, 2024

I acquired a significant stake in the DAVIDO token by buying 203 million units, which represented approximately 20.3% of the entire supply. Later on, I moved 20 million DAVIDO tokens to a wallet address that no longer receives transactions. Currently, my holdings consist of 61.12 million DAVIDO tokens, resulting in an estimated profit of $207,000 if I were to sell these tokens at their current market value.

Rume Ophi, a well-versed cryptocurrency authority, expressed his disapproval of Davido’s stance, proposing instead that he champion for regulatory certainty and exchange authorization in Nigeria’s digital currency sector.

Ophi issued a caution that Davido’s quick disposal of his memecoin holdings might transform it into a speculative bubble, thereby jeopardizing the sector’s reputation and inviting regulatory intervention from the Securities and Exchange Commission.

Despite the criticism levied against him, Davino has yet to address the backlash. His absence in response is particularly noteworthy given that some of his supporters, who may be new to cryptocurrency, could potentially suffer financial losses as a result. This incident underscores the larger concern surrounding celebrity-backed cryptocurrencies and the risks they present to unsuspecting investors.

As a market analyst, I’ve noticed an increasing trend towards celebrity-backed meme assets, such as the recent launch of MOTHER by Iggy Azalea. This development comes as no surprise, given the growing popularity and buzz surrounding this unique subset of cryptocurrencies. However, the long-term viability and ethical implications of these projects continue to spark intense debate and controversy within the industry.

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2024-05-30 22:28