LIBRA Token Incident Affects Solana Memecoin Ecosystem

The apparent LIBRA token rug pull is the latest incident to negatively impact the Solana memecoin ecosystem, according to a report from Galaxy Research on Monday.

The narrative had soured following the TRUMP token’s introduction in January and the ensuing “liquidity suck” it caused. LIBRA could inflict further damage on the memecoin complex, the report stated.

This situation may reduce the necessity for investors to hold Solana’s SOL, as its rise has primarily been driven by demand for SOL-denominated assets like memecoins.

Galaxy pointed out that the cryptocurrency has significantly decreased in U.S. dollar terms and against rival ether (ETH) since the LIBRA launch. As of the report, Solana was trading 8.6% lower at $168.73.

Argentina’s President Javier Milei has faced impeachment threats after promoting LIBRA, which ostensibly aids small businesses. The token surged to a market cap of approximately $4.5 billion before crashing by 90%.

This represents the latest troubling chapter in Solana’s memecoin landscape, significantly impacted since its peak in January with TRUMP’s launch, which briefly inflated its valuation to $75 billion (fully diluted valuation, FDV).

Kelsier CEO Hayden Davis, who launched the LIBRA memecoin, also issued the MELANIA token and claimed responsibility for sniping both as soon as the contract addresses went live.

Davis stated in an interview with crypto scam hunter Coffeezilla that the token was “not a rug pull.” He described it as “just a plan gone miserably wrong” with $100 million in an account that he manages.

Read more: Creator of Controversial LIBRA Memecoin Introduced MELANIA, Says He Sniped Both Tokens