The Neiro memecoin, a promising new player on the Solana blockchain, has left the crypto community in shock after a $2.85 million rug pull. This incident serves as a stark reminder of the volatility and risks inherent in the crypto market. In this article, we’ll delve into the details of the Neiro rug pull, explore the community’s response, and provide insights on how to protect yourself from similar scams.

Introduction to Neiro Memecoin and the Rug Pull

The developer of Neiro, a Solana-based memecoin, executed a rug pull, netting $2.85 million in the process. Initially investing just 3 SOL (around $552), the developer bought 97.5 million Neiro tokens, resulting in an incredible 5,169x return. This event has sent shockwaves through the crypto community, raising concerns about the safety and legitimacy of such investments.

In various wallets, the developer sold 68 million Neiro tokens, earning 15,511 SOL, equivalent to $2.85 million. Additionally, the developer purchased 10 million Neiro units and sent them to a dead wallet, leaving unrealized profits on another 19.5 million Neiro tokens amounting to $1.8 million.

Neiro Memecoin’s Origins and Rise to Popularity

Neiro is a meme coin on the Solana blockchain, named after Kabosu’s newly adopted dog, the same dog that inspired Dogecoin. The Neiro token was launched on July 28, 2024, following the announcement of the new dog adoption. This news captivated the cryptocurrency community, leading to significant trading volume and a rapid rise in the token’s popularity.

Kabosu’s owner initiated the token but distanced herself from it, warning against potential scams. Despite the lack of any particular use for the token, the fair launch aspect and a vibrant community of approximately three thousand Twitter followers and over 1000 Telegram members contributed to its rapid rise.

Community Response and Market Impact

The Neiro token quickly gained attention, amassing more than eight thousand holding addresses and a liquidity pool exceeding $1.1 million. Its price increased 100x, propelling its market capitalization to $18 million. However, the developer’s actions have created suspicions about the legitimacy and future of the token.

Neiro’s huge trading volumes have also impacted decentralized exchange (DEX) trading volumes on Solana, even surpassing those of Ethereum. This surge in activity highlights the potential market impact of popular meme coins despite the associated risks.

Consequently, ShibaInuHodler tweeted about the rising popularity of NEIRO, comparing it to the early days of Shiba Inu. They mentioned that NEIRO, associated with @kabosumama, has the potential to reach a $1 billion market cap soon, similar to DOGE and SHIB.

Rug Pull Concerns and Industry Implications

This incident is considered a rug pull, a type of exit scam where developers abandon their projects after quickly selling off their tokens for profit. This event serves as a stark reminder of the volatility and risks inherent in the crypto market.

The Neiro token’s case is not unique. Similar incidents have occurred within the broader memecoin sector, including sharp declines for various celebrity-backed memecoins post-launch. Such occurrences can damage the industry’s reputation, emphasizing the need for due diligence before investing in new coins.

Solana’s On-Chain Activity and Trading Volume

The trading mania related to Neiro tokens has significantly increased Solana’s network activities. Solana’s volumes have surpassed Ethereum’s, peaking at $1.8 billion over two consecutive days, driven primarily by Neiro token trading. This reflects the speculative nature of such investments.

Despite the controversy, Raydium, a Solana decentralized exchange, benefited from the enhanced trading volume. One weekend alone saw $2.5 billion pass through Raydium, representing its best single day since July. However, these developments also underscore the potential risks and speculative behavior within the memecoin market.

Summary

Despite the controversy surrounding the project, Neiro’s developer made substantial profits from the token’s increased value. Bubblemaps’ on-chain analysis showed that the developer took home at least $5.4 million from the token’s usage. This incident has sparked discussions on regulatory actions and investor safety in cryptocurrencies.

Neiro’s owner, who disassociated herself from the project, reiterated warnings against token scams, stating she endorses no cryptocurrency except OwnTheDoge. This event highlights the importance of due diligence and caution when investing in the volatile and speculative world of cryptocurrencies.

The author does not own or have any interest in the securities discussed in the article.