The Rise and Risks of Presale Memecoins

What's happening: In an eyebrow-raising trend, crypto enthusiasts (mostly all degens) are pouring millions into something called presale memecoins — digital tokens sold before launch, often without any tangible product or plan.

This week saw over $150m invested in such ventures, with one project snagging $30m in just 30 minutes.

How it works: Send your money to a crypto wallet associated to a random “new project” you find on Twitter. No whitepaper or landing page needed. And in return, receive an airdrop when the token officially launches. It’s like a simple IOU. The promise is high reward, but the reality is often high risk.

Why it matters: This frenzy mirrors the reckless ICO craze and raises concerns about investor protection. It's a high-stakes gamble with more losers than winners as several such presales have turned out to be full-on scams.

By the numbers:

• Some projects raised over $10M each.

• One project raised $30M in literally 30 minutes

• One project, named Slerf (not that it matters) raised $10M before the founder accidentally “burned” it all 

• Others managed to raise millions, before deactivating their Twitter account and disappearing. Straight robbery.

• And here’s a funny one: A spoof presale, meant to fund a Ferrari, actually drew $55K in 30 minutes.

What they're saying: The general sentiment on all this – from most onlookers in the crypto community – is rational; these presales are like “bidding ponzis”. Even Anatoly Yakovenko, Solana's co-founder, urged the community to refrain from such practices.

Our take: Beyond a point and laugh, it's times like these you'd hope to see the SEC (or even Twitter Community Notes) step up to protect or at least warn investors. This behavior is a lot worse than what we witnessed with NFTs and ICO’s years ago.

On the other side of the token, it is quite fascinating to see. Everything seems to be on hyper-speed right now. The market reached new all-time highs way before everyone expected. And I don't think anyone expected "peak degeneracy" this early in the bull market.

Lastly, just another bad look for DeFi… and the platform making all of it possible: Solana (SOL).