Grace Ashiru
In his third venture into the world of cryptocurrency, Afrobeats superstar Davido promoted and endorsed the crypto token—or memecoin, depending on the perspective—”Timeless Davido” ($DAVIDO) on Wednesday night. Despite the token’s utility being unclear, with its use cases seemingly tied to an unknown website and Telegram group, it was launched on the Solana blockchain and quickly gained attention amidst other obscure crypto tokens.
“Solana just ships. Welcome Davido,” tweeted Solana’s official Twitter handle to the superstar on Wednesday night. Within four hours of its launch, $DAVIDO surged to a $10 million market capitalization. With the Grammy Award nominee actively endorsing the coin in multiple tweets, the initial momentum suggested a promising upward trajectory.
The excitement was short-lived. By Thursday morning, $Davido’s valuation had dropped by 90 percent, and according to DEX screener, the coin’s liquidity stood at $291,000 at the time of this report.
This isn’t the singer’s first venture into crypto. In November 2021, he introduced $echoke on the Binance Smart Chain, aiming to “provide access to giveaways, NFTs, festivals, exclusive merchandise, and other entertainment, media, and hospitality benefits.” However, this project was short-lived and soon faded from memory.
He also promoted Racksterli, a Ponzi scheme that reportedly defrauded users of ₦1 billion, on YouTube, leading to backlash and calls for a more responsible use of his influence.
With $Davido, coin holders are facing the possibility that they may have fallen victim to a rug pull, a situation where project developers abandon the project and take all the invested funds.
Davido does not need this kind of negative publicity. Whatever money he earned from it is not worth it,” a crypto expert told TechCabal.
Davido’s management did not respond immediately to requests for comments.
Many who purchased the coin were under no illusions that it was a long-term investment. However, they anticipated it would ride a wave and at least see a valuation increase, allowing them to profit. This would have required the developers to resist the urge to execute a pump-and-dump scheme on users.
In the crypto tokens and meme coins world, pump-and-dump schemes are common. These schemes involve a person or group artificially inflating a token’s price before selling their holdings at the peak. This leaves anyone who bought into the hype holding the bag.
Memecoins often experience significant valuation jumps before cooling off. However, three crypto experts told TechCabal that, in many cases, the promoters of these coins structure them to allow ordinary users to profit as well. In the case of the $DAVIDO coin, the creators appeared to be willing to take profits at the expense of the coin holders from the start.
Several prominent crypto influencers began raising alarms on Wednesday night, noting that the wallet responsible for creating the token had sold off a substantial amount, cashing out $200,000 within a few hours.
“It’s clearly a pump and dump scheme. The wallet that initiated the token is trackable, and it was offloading the token live as Davido was tweeting about it,” a crypto trader, who requested anonymity, told TechCabal.
Another coin analysis account claimed that the token’s creators had accumulated approximately $500,000 in less than 24 hours, crashing the coin’s price and leaving users at a loss.
