tl;dr
Solana has become a hub for pump and dump memecoins, attracting high-profile individuals to fuel rapid growth. Covert participants control a significant portion of the multi-billion dollar memecoin market, leading to lucrative trades for insiders and losses for retail investors. Solana has become a ...
Solana blockchain has become a hub for the rapid growth of memecoins, drawing high-profile individuals such as U.S. President Donald Trump and Argentina President Javier Milei. Covert participants now control a significant market share, leading to lucrative trades for insiders and losses for retail investors.
High-profile individuals, including Trump and Milei, launched their official memecoins on Solana, causing significant depreciation after launch. Retail investors bear heavy losses, with Trump's memecoin losing nearly 85% of its value and Melania's memecoin down nearly 95% from its peak.
The rise of memecoin platforms on Solana, such as Pump.fun and Meteora, exacerbates the issue, creating a zero-sum game for investors. Cabals, specialized groups launching and manipulating memecoin prices, are involved in pump-and-dump schemes, exploiting retail investors.
The SEC does not consider memecoins as securities, leaving investors without federal protections. Despite this, Cathie Wood believes that retail investors will learn from their memecoin losses, emphasizing the potential for significant declines in memecoin prices.