PEPE: Whales could become a threat for new meme coin
Originally posted here.
By: Stephan Fiedler
In its second week of trading, the new meme coin PEPE is holding levels reached at its rocket launch and has made individual investors rich. […]
In its second week of trading, the new meme coin PEPE is holding levels reached at its rocket launch and has made individual investors rich. But blockchain analysis shows price risks coming from Whales.
PEPE is the name of the young meme coin that has been making headlines for just over a week with a green frog as its symbol and several hundred percent gains in its price curve. We already reported on possible political faux pas in connection with PEPE at the time of its debut. In the meantime, there are also results from the blockchain analysis on PEPE that give rise to skepticism. In a blog post , “An Ape’s Prologue” summarizes how a dozen or so early investors hold such a concentrated amount of PEPE that they could cause a price plunge at any time with sell-offs.
Specifically, three small groups of wallets were identified that bought PEPE at rock-bottom prices immediately after trading began and are now looking at theoretical profits in the millions. One example: two wallets acquired 5 trillion PEPE for around $300 in Ethereum (ETH) – and on paper, the investment would currently already be worth $1.5 million. The problem: PEPE has so far been traded mainly on the decentralized crypto exchange Uniswap, and the liquidity pools there are only stocked with around 3 million US dollars in ETH. So if two or three of the freshly minted PEPE whales brought their holdings to the market at the same time, the price curve would automatically plummet towards zero.
Analysts at Pro Plus Labs also sounded the alarm on PEPE. They count 22 percent of the total stock of all tokens for the ten largest PEPE wallets, which confirms the risks listed above. However, they have also discovered critical details in the smart contract on which PEPE is based as an ERC-20 token in the Ethereum ecosystem. For example, the founders of PEPE, who have so far remained anonymous, have reserved the right in the code to create a blacklist, i.e. to exclude certain wallets from trading. CoinMarketCap has also provided PEPE with a warning notice for this reason. However, the discussion on Reddit signals the all-clear. The smart contract used for PEPE has been sent to a so-called “zero address”, where no one has access anymore.
Conclusion: PEPE meme coin harbors considerable risks for investors
It is quite possible that the PEPE Whales, who are now under critical scrutiny, are from the founding team and therefore have no interest in ruining their project with sell-offs. But there is no guarantee of that. Other questions like the one about the intended use for PEPE basically also concern the most famous meme coin Dogecoin (DOGE). This shows once again: If you are an investor in the field of meme coins and now have PEPE in your sights, you should definitely do your own research in order to at least assess the considerable risks.
PEPE is not yet traded on many crypto exchanges. You can buy the token at MEXC .