Rinse, Rug, Repeat: Deconstructing the Modern Memecoin Playboo

2025/08/26 23:43

rom the vantage point of seven years across exchanges, media, and infrastructure in this space, you learn to recognize patterns. The technology evolves, the narratives shift, but the cycles of human greed remain remarkably consistent. We are currently in a cycle dominated by celebrity-endorsed memecoins, a frothy, dangerous casino that promises generational wealth but often delivers systemic exploitation. And if you’ve been on the losing end, you’ve likely contributed to the profits of operators who have mastered this new, predatory playbook.

To understand this system, we need to look no further than the on-chain trail of Hayden Davis, also known as Kelsier of Kelsier Ventures. His alleged activities provide a perfect blueprint for how insiders weaponize hype, manipulate nascent markets, and drain liquidity, leaving retail investors as the final bagholders. This isn’t just about one person; it’s about a repeatable model that betrays the first principles of Web3.

The Anatomy of the Hunt

The playbook is both simple and devastatingly effective. It has three core phases:

Infiltration and Pre-Positioning: The operator gains proximity to a major cultural figure — a politician, a musician, a celebrity. Before any public announcement, a network of insider wallets acquires a significant portion of the token supply at virtually zero cost. This is the critical, unseen setup. We saw this with the $MELANIA token, where Davis himself admitted to shaping the launch strategy, while on-chain data later revealed a cohort of wallets loading up moments before the public could.
Manufacturing Legitimacy and Hype: The token is launched, wrapped in the borrowed credibility of the celebrity. In the case of the $LIBRA token, linked to Argentine President Javier Milei, Davis went as far as positioning himself as a “blockchain and AI advisor” to the president. This creates a powerful narrative that overrides traditional due diligence. Retail investors see a famous name and rush in, creating the parabolic price surge the insiders were waiting for.
The Exit: As public buying reaches a fever pitch, the insiders execute their exit with brutal precision. They dump their pre-mined tokens into the market, crashing the price. In the most egregious cases, like the $LIBRA collapse where the market cap bled $4.6 billion in six hours, the team goes a step further by pulling tens of millions in USDC and SOL directly from the liquidity pool. The game is over. Insiders walk away with fortunes; the public is left with a worthless asset and a painful lesson.

The Cycle Continues

This is not a historical account. The cycle is accelerating. The latest analysis from on-chain forensics platform Bubblemaps suggests the same operator may have just run this playbook on the $YZY token, launched by Kanye West, to the tune of a $12 million profit in a single night.

The names change, but the mechanics remain the same. A celebrity’s cultural capital is converted into market hype, which is then systematically drained by insiders who were positioned from the start.

A Betrayal of First Principles

What makes this cycle so corrosive is that it uses the very tools of Web3 — decentralized exchanges, permissionless token creation, and public ledgers — to perpetrate the oldest forms of financial manipulation. The promise of Web3 was to create fairer, more transparent systems. Instead, in the memecoin arena, transparency has merely given us a clearer view of the crime after it has occurred.

As an industry, we must decide what we want to be. Will we continue to celebrate these short-term, extractive cycles, or will we build systems resilient to them? Until we prioritize sustainable value over manufactured hype, the playbook will be run again and again. The only question is who the next celebrity will be, and how many more retail investors will become their exit liquidity.

Rinse, Rug, Repeat: Deconstructing the Modern Memecoin Playboo was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

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