Messi-Promoted Memecoin Faces Backlash Over Alleged Hefty Insider Allocations

Memecoin creators are finding brief success in recruiting soccer stars to shill their tokens. But celebrity endorsements can’t cover up suspiciously centralized token distributions.

The price of WATER, a Solana-based memecoin, surged 323% in 10 hours after enjoying inorganic promotion from the Argentinian soccer legend, Lionel Messi.

On July 8, Messi shared a photo of WATER’s mascot on his shoulder with his 504 million Instagram followers. Messi’s acolytes quickly responded, pushing the price of WATER to a local top of $0.0012 from an all-time low of $0.00028 on the same day, according to CoinGecko.

On the following day, Gaúcho Ronaldinho, another soccer star, followed up with his own picture donning the cartoon mascot, prompting a short-lived bounce in the token’s price followed by consolidation.

WATER last changed hands for $0.000894 at a market cap of $65 million. However, the asset has crashed 67.6% from its June all-time high — posted one day after the token’s launch.

Centralized control

Despite the short-term hype garnered by WATER’s celebrity endorsements, blockchain sleuths are raising the alarm on sizable insider token allocations.

Analysis from BubbleMaps, a tool visualizing the distribution of a token’s supply, shows that more than 30% of WATER’s supply appears to be controlled by insiders. The data indicates that roughly one dozen Solana wallets hold around 35% of WATER tokens, with the three largest commanding 16% of the asset’s supply.

“If you want to control your supply, use one or two labeled wallets instead of spreading it across dozens of wallets and being shady about it,” BubbleMaps tweeted.

Crypto analyst Ericonomic warned that WATER investors could be particularly vulnerable to falling prey to a rug-pull exit scam — where large liquidity providers abruptly withdraw their funds from an asset’s liquidity pool, leaving the majority of investors unable to sell their funds.

Ericonomic noted that WATER is the third token that Messi has promoted on social media, with the previous two projects culminating in rug-pulls shortly after Messi spruiked them.

“The first one was Leafty, which was a rug (they removed the liquidity like 5 days later lol),” Ericonomic tweeted. “The second one was PLANET, a slow rug that is like -90% since that promotion. This time it’s Water. They will probably rug soon so make yourself a favor and don’t buy that sh*t.”

Water claims to champion water-related charitable initiatives, but fails to provide concrete information regarding what organizations it plans to support or how.

Solana overtakes Ethereum amid memecoin mania

Solana’s memecoin trading frenzy has propelled the network to overtake Ethereum by on-chain trading volume. On July 9, Solana-based DEXes hosted $14 billion worth of trade — a 93% rise from the prior week — to edge out Ethereum with $13.8 billion.

The milestone came as Raydium, Solana’s top decentralized exchange, hosted 57 million transactions in seven days. By contrast, Uniswap, the leading Ethereum-based DEX, processed 4.46 million transactions over the same period.

According to Step Finance data, more than 100,000 tokens were created on Solana in the past seven days, alongside more than 500,000 tokens over the past month.