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Solana Welcomes $Davido Coin, But Party Ends Quickly as Valuation Drops Overnight
On his third lap in cryptography, Afrobeats superstar Davido endorsed and promoted “Timeless Davido”, $DAVIDO, a cryptographic token – or memecoin, depending on who you ask – on Wednesday night. While the token’s usefulness was unclear – the use cases appeared to be linked to an unknown website and a Telegram group – it was launched on the Solana blockchain and immediately broke through the noise of other obscure crypto tokens.
“Solana just sends it. Welcome Davido,” Solana tweeted to the superstar on Wednesday night, as $Davido raced to a $10 million market cap within four hours of its launch. It seemed like the only way from there was up, with the Grammy nominee endorsing the coin in several tweets.
The excitement was short-lived. As of Thursday morning, $Davido’s valuation had fallen by 90 and according to the DEX tracker, the coin’s liquidity was $291,000 at the time of this report.
It’s not the singer’s first crypto rodeo. In November 2021, he launched $echoke on the Binance Smart Chain to “provide access to giveaways, NFTs, festivals, exclusive merchandise and other entertainment, media and hospitality benefits.” The short-lived project was soon forgotten.
He also promoted Racksterli, a Ponzi scheme that allegedly defrauded users of ₦1 billion, in YouTubeand, provoking reactions and arguments for more responsible use of her star power.
With $Davido, coin holders are coming to terms with the possibility that they have been victims of a rug pull, a phenomenon where project developers abandon the project and take all invested funds with them.
“Davido doesn’t need this kind of negative publicity. Any money he made from this is not worth it,” a crypto expert told TechCabal.
Davido’s administration did not immediately respond to a request for comment.
Many people who bought the currency were under no illusions that it was a long-term project, but rather hoped that it would ride the wave and at least increase its value, allowing holders to profit from it. This would have required developers to resist the temptation to pull and dump users.
In the world of crypto tokens and meme coins, pump and dump schemes are normal and involve someone or a group of people artificially inflating the price of a token before selling them at those high prices. This leaves anyone who bought into the hype holding the bag.
Memecoins often have periods of big valuation jumps before cooling off, but three crypto experts told TechCabal that in many situations, the promoters of these coins structure them so that many ordinary users can also make a profit. For the $DAVIDO coin, the creators appeared to be willing to make profits at the expense of the coin’s holders from the beginning.
Several prominent crypto handles began issuing warning signals on Wednesday night, claiming that the wallet that created the token had sold a significant amount and withdrawn $200,000 within hours.
“It’s obviously a pump and dump scheme. The wallet that released the token is traceable and was dumping the token live while Davido was tweeting about it,” a crypto trader who asked not to be identified told TechCabal.
Another coin analysis handle claimed that the coin’s creators raised around $500,000 in just under 24 hours, destroying the coin’s price and leaving users holding the bag.