In the wild world of meme coins, few launches have sparked as much frenzy and controversy as Kanye West's $YZY token. Recently, a thread on X (formerly Twitter) from @StarPlatinumSOL shed light on what might be one of the most extractive events in crypto history. Let's break it down step by step, keeping things simple for anyone dipping their toes into blockchain waters.

What Happened with $YZY?

Kanye West, now known as Ye, jumped into the crypto scene with the launch of $YZY on the Solana blockchain around August 20, 2025. Memecoins are essentially fun, community-driven cryptocurrencies often inspired by internet memes or celebrities, and they can skyrocket in value based on hype alone. $YZY was no exception—it surged to a staggering $3 billion market cap in no time, pumping over 6,800% from its starting point.

But the excitement was short-lived. The token quickly tanked, dropping as much as 99% in value. Why? On-chain data— that's the transparent record of transactions on the blockchain—revealed some shady details. Insiders controlled a whopping 94% of the token's supply right from the start. Even more alarming, a single multisig wallet (a secure wallet requiring multiple approvals for transactions) held 87% of that supply before it was distributed.

The Insider Advantage Exposed

According to analytics from experts like Coinbase Director Conor Grogan, this setup allowed insiders to dump their holdings at peak prices, extracting millions in profits. Reports estimate that these early holders cashed out around $24.5 million while retail investors—regular folks like you and me—got left holding the bag as the price plummeted.

This isn't uncommon in the memecoin space, where "rug pulls" happen when creators or insiders pull out liquidity, crashing the token's value. But $YZY stands out for its scale and the celebrity involvement. Kanye himself hasn't publicly commented much on the token, leading some to speculate if it was even officially endorsed or just riding on his fame.

For more in-depth analysis, check out the original thread on X or the explanatory video linked there on YouTube.

Lessons for Meme Token Enthusiasts

Events like this highlight the high-risk nature of meme coins. While they offer the thrill of potential quick gains, they're often riddled with manipulation. As blockchain practitioners, it's crucial to do your due diligence: check token distribution on platforms like DexScreener or Solana Explorer, look for locked liquidity, and beware of hype-driven pumps.

At Meme Insider, we're all about equipping you with the knowledge to navigate these waters. Stay tuned for more breakdowns on the latest in meme tokens and crypto trends. What do you think—will celebrity memecoins ever clean up their act, or is this the new normal?