A LIBRA meme coin pump-and-dump game has caused a stir in the crypto community. On February 15, the president of Argentina announced the launch of a meme coin called LIBRA, which quickly surged in value, reaching a market cap of over $4 billion at one point. However, the price then plummeted in less than a few hours, and the current price is $0.36, with a market cap of less than $400 million. The Argentine president deleted his tweets promoting the meme coin just hours after posting them, stating that he "thought it would be like before, just casually supporting a private startup project unrelated to him. He was not aware of the details of the project and will absolutely not promote it further (which is why he deleted the tweets) after understanding it."
Investors who rushed to participate in the on-chain meme pump suffered heavy losses. Solayer developer Chaofan Shou and Tonykebot lost over $2 million in this endeavor and publicly revealed the core team members of KIP Protocol behind LIBRA, vowing to pursue accountability. According to lmk.fun's monitoring, based on transaction records, 24 traders lost over $1 million on LIBRA, and 61 traders lost over $500,000. The biggest loser realized a loss of $5.17 million, having spent $5.6 million to purchase 2.1 million tokens, only to sell them for $430,000. In contrast, 8 wallets associated with the LIBRA team managed to cash out around $107 million through adding and removing liquidity and collecting fees, obtaining 576,000 USDC and 249,671 SOL (around $49.7 million).
Insider trading, celebrity influence marketing, and pump-and-dump games in meme coins have once again become a focus of market attention.
Today, Paridigm researcher Samczsun, Solana co-founder Toly, and crypto KOL Cobie discussed their views on Twitter.
Conspiracy Groups and KOLs
Samczsun initiated the discussion by asking whether the event would lead to some parties being held accountable on a social level.
Toly's response was pessimistic, as "social mob justice itself is a problem because it's a passive reaction to the outcome, not based on a pre-set and widely accepted set of rules." Attackers can infinitely generate failed tokens, become the sole bidders, acquire most of the supply, and then hand over the contract address to KOLs. In Toly's view, the only solution is to enforce social credit scores for users and reject tokens from those with low scores.
Samczsun further asked that if meme coins controlled by insiders are bad, why not formally start by excluding all participants? In the short term, the benefits of one-time profits would not outweigh the costs of being excluded, and in the long run, such behavior would not be profitable at all.
Toly's answer was simple and direct: once KOLs promote the contract address, they will be shunned by their fan base, and the conspiracy group will then move on to the next KOL.
Cobie stated that many KOLs don't even know who they're dealing with or what they're promoting. Their brokers just tell them that if they tweet about it, they'll get X coins.
If KOLs and their brokers are told about something clearly bad, will the KOLs be held accountable for their actions? We often see multiple instances of insider trading and fraud in certain tokens, but no one faces any consequences.
Some KOLs' reputations have indeed been affected, partly because "how do you define good and bad in meme coins? Even with completely unintentional free-market token distributions, the top 20% of holders will end up with over 80% of the tokens," as Toly explained.
Cobie then bluntly stated that there is currently no effective way to shame the shameless. He then posted a long Twitter thread to elaborate on his views.
"This has existed before meme coins, basically since I first got involved in crypto. (The recent operations are just more efficient and obvious.) Whenever someone gets shamed, they turn it into populist rhetoric and some even become more popular. The accused just accuse others in return, creating a standoff. For example, some YouTubers have been promoting scams for three cycles in a row, and despite constant exposures, they remain popular. The cyclical nature of the crypto industry means there will always be new entrants to replace the old users, so these people can always find a new audience."
Lack of Truth and Regulation in the Market, Often Ending in Nothing
In Cobie's view, the only people he's seen truly shamed out of the industry are either those with relatively good reputations who made mistakes, or those who don't need to rely on the industry to make money. But those who truly deserve to be expelled already know what they're doing and have made their choice. Exposing them doesn't make them feel ashamed, it just threatens their income, so they fight back. And without a "truth arbiter," the debates often have no final conclusion.
Cobie also stated that it may take more than five years for the public to truly recognize human nature, and that's only if they make obvious mistakes in the process.
"If fraudsters don't face the threat of losing their freedom, it's almost impossible to prevent them from continuing to defraud."
The Pump-and-Dump Game Faces an Unsolvable Dilemma
Regarding the current controversies around high-valuation VC coins and the fast-paced issues in meme coins, Cobie provided a sharp commentary. He stated that the current market trajectory is that market participants eagerly rush into these scams like moths to a flame, knowing full well that they are scams, but with the goal of selling to the next bag holder at 3x the price. They only want to get rich in 2 weeks, not 2-4 years. Players hope they can also hit the jackpot in the next round.
If there's no way to stop them, the best option may be to avoid participating.
Cobie stated that investor/player behavior is easily changed. If you lose 10 times, you'll stop playing the game. No one buys VC coins anymore, in fact, some (very, very few) of them were mispriced. They no longer buy these coins because they're tired of being exploited.
Cobie had previously written about high FDV, low-liquidity VC coins, but he was disappointed that it didn't achieve his desired goal and didn't stop the public from buying these tokens. The only way to change investor behavior is for participants to lose enough to feel the pain. It's only after suffering real losses that this group can truly realize they should avoid participating.
Cobie wrote, "This in turn changes the behavior of the token issuers, as the public will no longer buy these products, so you can't easily issue these types of tokens anymore."
Conclusion
If you were to launch a token called Echo now and had to choose between two paths:
(1) Sell 25% to VCs and insiders, retain 35% for the team, and launch a token that receives revenue distributions from Echo's business, with low liquidity;
(2) Sell 0% to anyone, retain 50% yourself, and launch a memecoin called "Echo the Racist Dolphin" that has no connection to Echo other than the name, deployed from your public wallet and tweeted about through a CA account;
Which one do you think would have a higher market cap? Cobie's answer is that the meme coin's value (at least for now) would be higher than the VC coin. But if you repeat the same experiment in 5 years, the result would be the opposite.
Interestingly, in Cobie's comment section, there was a helpful commenter who asked which of the two tokens mentioned was the one being referred to.
Cobie said he would release the contract address in 25 minutes, and Toly commented: Do you have any shame?
Cobie responded that it was just a joke, and jokingly used Buterin's title (V's name) to mock Toly.
