Davido, the popular Afro-pop star, has faced criticism from the Nigerian crypto community regarding his management of his recently launched meme token, DAVIDO. Many individuals believe that he may soon engage in a token dump.
According to Lookonchain, Davido made a significant profit of 2,783 SOL ($473,000) within just 11 hours by selling his DAVIDO memecoin after its launch on May 29. As of now, the singer still holds an unrealized profit of $207,000.
To initiate the launch of his memecoin, Davido received an initial investment of 7.5 SOL (equivalent to $1,275) and then used 7 SOL ($1,190) to create and launch his DAVIDO token on the platform pump.fun. This allowed him to purchase 203 million DAVIDO tokens, which represents 20.3% of the total supply.
As reported by Lookonchain, Davido also transferred 20 million DAVIDO tokens to the address “dead1111…1111,” leaving him with 61.12 million DAVIDO tokens worth $207,000.
While Davido has remained silent on the matter, his fans and the crypto community have strongly criticized his withdrawal of substantial amounts from his DAVIDO token stash while simultaneously encouraging others to invest.
Rume Ophi, a local crypto expert, suggests that Davido could have taken a more strategic approach by advocating for regulatory clarity and exchange licensing within Nigeria’s crypto space rather than launching his own token. Ophi believes that Davido’s memecoin runs the risk of becoming a pump-and-dump scheme, which would undermine the credibility of the industry and attract scrutiny from the Securities and Exchange Commission (SEC).
Cointelegraph reached out to Davido for comment but did not receive a response by the time of publication.
This move by Davido, who has a large following that includes many inexperienced individuals in the crypto space, could potentially cause widespread financial harm and lead to increased regulatory pressure on legitimate players.
One user expressed disappointment that Davido and his team did not allow the new memecoin to gain momentum. They suggested that more profits could have been made if Davido had approached the launch in a more strategic manner, allowing the token to increase in value before selling a large amount immediately after its launch.
Another user, @Toobbss, pointed out that this is not the first time Davido has dumped digital coins on his fans. In the past three years, Davido has engaged in a similar behavior, leaving his followers to bear the financial losses. In 2021, he promoted RapDoge before dumping over $300,000 on his fans.
Davido’s actions within the cryptocurrency world align with the growing trend of celebrity meme assets. Recently, Iggy Azalea introduced her own token, MOTHER. However, these celebrity-backed cryptocurrency launches have been controversial, putting investors at risk of potential pump-and-dump schemes and resulting in financial losses.
In related news, a leaked magazine revealed the celebrity price list of the alleged “mastermind” behind the Caitlyn Jenner meme coin.