The r/WallStreetBets subreddit, which gained notoriety for instigating the GameStop short squeeze in January 2021, has now entered the world of cryptocurrency with the recent launch of the WSB Coin (WSB). The token, deemed the official memecoin of Wall Street Bets, was introduced on May 2 by individuals involved in moderating the popular trading subreddit. According to the creators, there would be no team allocation for the WSB token, and 10% of the coins would be earmarked for the subreddit community. They emphasized the fairness of the launch, stating on the website, “It’s the fairest launch memecoin you will find with no team allocation and no presale. Just a free airdrop and some coins for the community.”
However, this fair and transparent token launch was soon marred by controversy. A mere two days later, a team member allegedly dumped a massive number of WSB coins, leading to a significant drop in the token’s price. On May 4, on-chain detective ZachXBT reported that “zjz.eth,” who runs the moderation bots for the subreddit, had effectively “pulled the rug” on WSB investors. On-chain data revealed that zjz.eth had sold WSB coins in exchange for 334 Ether (ETH), amounting to around $635,000 at the time of writing.
Following this revelation, the WSB token price plummeted, falling from an all-time high of $0.00067279 to an all-time low of $0.00004827 within just two days. The community, understandably alarmed by this turn of events, urged individuals to refrain from buying the dip, as the moderators still had access to 10% of the total supply.
This incident highlights the need for caution and skepticism when dealing with new token launches and cryptocurrency investments, particularly in the realm of memecoins. While it may be tempting to jump on the bandwagon, it’s crucial to be aware of potential risks and conflicts, as these can lead to dire consequences for investors.
In the case of the WSB token, the swift actions of the moderators and the alleged duplicitous conduct of zjz.eth have raised serious questions about the integrity of such projects. These concerns cast a shadow on the world of memecoins, demonstrating the importance of transparency, fairness, and responsible management in the rapidly evolving world of cryptocurrency investing.
As the popularity of memecoins continues to rise, the lesson to be learned from the WSB coin launch is that stakeholder trust must be maintained, and caution exercised to protect the interests of the wider community. Investors must remain vigilant and ponder the pros and cons of such ventures, so as not to be caught off guard by the volatility and risks inherent in the still-emerging world of cryptocurrencies.