The LIBRA Token Incident: A Troubling Development for Solana’s Memecoin Ecosystem
The recent incident involving the LIBRA token has raised significant concerns within the Solana memecoin ecosystem, as highlighted in a report released by Galaxy Research on Monday. This event follows a series of negative developments that have contributed to a souring narrative around memecoins, particularly after the introduction of the TRUMP token in January, which led to a detrimental “liquidity suck.”
According to Galaxy Research, the fallout from the LIBRA token could further destabilize the already fragile memecoin landscape. The report indicates that this situation might diminish the incentive for investors to hold Solana’s native cryptocurrency, SOL. Galaxy pointed out that the recent increase in SOL’s value has primarily been fueled by demand for SOL-denominated assets such as various memecoins.
Since the launch of LIBRA, Solana has experienced a notable decline in its value, both in terms of U.S. dollars and relative to its competitor, ether (ETH). As of the time of publication, Solana was trading at approximately $168.73, reflecting an 8.6% decrease over a 24-hour period.
Adding to the controversy, Argentina’s President Javier Milei has faced impeachment threats after endorsing the LIBRA token, which he claimed would support small businesses. Initially, LIBRA saw a meteoric rise, reaching a market capitalization of around $4.5 billion before experiencing a staggering crash of 90%.
This incident marks yet another troubling chapter in the saga of Solana’s memecoin ecosystem, which has seen a steep decline since peaking in January following the TRUMP token’s launch and its brief ascent to a fully diluted valuation (FDV) of $75 billion. Alex Thorn, the head of firmwide research at Galaxy, described this situation as the “latest sordid episode” in the ongoing narrative.
Hayden Davis, the CEO of Kelsier and the individual behind the LIBRA memecoin, has claimed responsibility for the MELANIA token as well, stating that his team executed a “sniping” strategy as soon as the contract addresses for both cryptocurrencies went live. In an interview with crypto scam expert Coffeezilla, Davis asserted that the LIBRA token incident was “not a rug pull.” He characterized it as “just a plan gone miserably wrong,” insisting that there is $100 million currently held in an account for which he serves as the custodian.
