The developer of Neiro, a Solana-based memecoin, executed a rug pull, making $2.85 million by selling tokens.
Points
- Neiro’s developer made $2.85 million by selling tokens.
- The developer initially invested 3 SOL and bought 97.5 million Neiro tokens.
- This incident highlights the risks associated with memecoin investments.
According to reports, the developer of Neiro, a Solana-based memecoin, has executed a rug pull, making $2.85 million in the process. He initially invested 3 SOL, or around $552, and bought 97.5 million Neiro tokens, resulting in an incredible 5,169x return.
In various wallets, the developer sold 68 million Neiro tokens, earning him 15,511 SOL, equivalent to $2.85 million. It is worth noting that these actions entailed the purchase of 10 million Neiro units, which he sent into a dead wallet, leaving unrealized profits on the remaining 19.5 million Neiro tokens amounting to $1.8 million.
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Neiro is a meme coin on the Solana blockchain named after Kabosu’s newly adopted dog, the same dog that inspired Dogecoin. The Neiro token was launched on July 28, 2024, following the announcement of the new dog adoption. This launch captivated the cryptocurrency community, resulting in significant trading volume.
Community Response and Market Impact
Neiro quickly gained attention, amassing over eight thousand holding addresses and a liquidity pool exceeding $1.1 million. Its price increased 100x, propelling its market capitalization to $18 million. However, the developer’s actions raised suspicions about the legitimacy of the token.
Consequently, ShibaInuHodler tweeted about the rising popularity of a new dog-themed cryptocurrency, NEIRO. Comparing it to the early days of Shiba Inu, @ShibaInuHodler mentioned that NEIRO, associated with @kabosumama, has the potential to reach a $1 billion market cap soon, similar to DOGE and SHIB.
Rug Pull Concerns and Industry Implications
This incident is considered a rug pull, a scam where developers exit their projects after selling off their tokens quickly for profit. This event serves as a stark reminder of the volatility and risks inherent in the crypto market.
Neiro’s case is not unique; similar incidents have occurred within the broader memecoin sector, including sharp declines for different celebrity-backed memecoins post-launch. Such occurrences can damage the reputation of the industry, emphasizing the need for due diligence before investing in new coins.
Solana’s On-Chain Activity and Trading Volume
Trading mania related to Neiro tokens has significantly increased Solana’s network activities. With Solana’s volumes surpassing Ethereum’s and peaking at $1.8 billion over two consecutive days, it reflects the speculative nature of memecoins.
Raydium, Solana’s decentralized exchange, benefited from this enhanced trading volume, witnessing $2.5 billion in a single weekend. However, these developments also underscore the potential risks and speculative behavior within the memecoin market.
Despite the controversy, Neiro’s developer profited significantly from the token’s increase in value. On-chain analysis from Bubblemaps showed that the developer earned at least $5.4 million from the token’s usage. This incident has sparked discussions about regulatory actions and investor safety in cryptocurrencies.
Neiro’s owner, who disassociated herself from the project, warned against token scams, stating she endorses no cryptocurrency except OwnTheDoge.