Is Solana A Scamchain?

I’ve been a Solana hater for a while. I have always felt that it was built on scams and has hurt ordinary crypto investors. SBF’s association, the forced selling of SOL tokens by FTX holders, and the discounted SOL sold to VC firms (that begin unlocking in March) leave a foul taste in my mouth.

However, Coffeezilla's most recent interview, linked below, illustrates how rigged the Solana casino is.

If you aren’t familiar with the $LIBRA launch, it was a memecoin launched on behalf of the Argentinian government and promoted by Argentina’s president Javier Mille. Unfortunately, the project scammed investors, and the resulting losses can be seen below.

$287 million in losses by nearly 75,000 investors on one scam project in less than 24 hours. Even worse, the Coffeezilla interview of Hayden Davis, one of the people behind the $LIBRA launch, confirms that nearly every meme project launched on Solana has been a scam.

How The Solana Scams Work

The $LIBRA scam has been going on in Solana for a long time. Here’s a quick overview of how it works. An inside group decides to launch a memecoin. They share the contract address of the coin with another group that buys or “snipes” a large percentage of the tokens at a very low price (near $0). This group buys huges sums of the memecoin, giving the impression that it will be a successful project. Oftentimes, KOLs (Key Opinion Leaders), AKA Snake oil salesmen, are in on the con and promote the new token to their followers. Degen crypto gamblers buy the tokens at artificially elevated prices while the insiders, snipers, and KOLs sell on the pumps.

Once the last bagholder has bought, there is no more buying pressure and the memecoin’s price craters. 99% of the time, the only people making money on these scams are the insiders, KOLs, and some lucky investors who bought and sold before the pump and dump was completed.

In the case of $LIBRA, the KOL happened to be Argentina's president with 3.8 million followers on X. And the results are shocking. While this playbook has been suspected by many in crypto for a long time, it still didn’t prevent the same game from playing repeatedly. Crypto investors are used to volatility, and many want to chase the instant riches narrative.

What Coffeezilla’s Interview Uncovered

Shockingly, one of the people behind the $LIBRA launch, Hayden Davis, was interviewed by Coffeezilla yesterday. He 100% confirmed the scam that has been happening on Solana for a while now. Listening to the interview, he pathetically makes it sound like he is a victim after admitting that he has been part of several launches where insider information (shared contract addresses) and bribes (to KOLs) have occurred.

In reality, Hayden is scared for his life because he is one of the few people with access to the $100+ million in crypto scammed by investors. And, because this was such a high-profile scam, people are looking for answers. People look the other way when crypto degens lose thousands of dollars quickly. However, when larger investors are losing millions, and a national president is involved, you know dogs will be sniffing around.

Hayden also alluded to the fact that insiders had knowledge of the $TRUMP launch, and the same team that launched $LIBRA also launched the $MELANIA coin, which brutalized so many investors. I think one of the most disgusting parts is that many of the platforms on Solana are either directly involved with the scams or, at the very least, are complicit in promoting them.

The platforms are gigantic moneymakers from the transaction fees generated by trading these worthless Grift tokens. Solana is a huge beneficiary as it increases transaction fees, and many of the degen traders even pay elevated fees to ensure their transactions occur before they get front-run by the MEV scam that is also present on Solana.

One platform, Meteora, is a particularly shady operator in this space. The liquidity pools for these massive launches, such as $TRUMP, $MELANIA, and $LIBRA, occurred on Meteora, and they played a nefarious role in the liquidity pools. Who knows how deeply Jupiter, Raydium, or other platforms are in this cesspool?

How this Hurts Solana

Investors are waking up that the only ones making money on Solana are the VCs (who own much of the Solana), the crooked creators and insiders, and the platforms that perpetuate this rigged game.

Imagine there was a casino in Las Vegas where 99% of the slot players lost every single time they played. Solana traders are waking up to the reality that if they aren’t invested in $SOL or the platforms, they are in this 99% pool.

And I have experienced this personally. Meteora launched a memecoin called M3M3, which I wrote about and invested in. They created a narrative that it was an investor-friendly ecosystem, but that was a lie to draw in naive investors like myself. I can handle my losses and accept responsibility, but I’m disgusted by the disingenuousness of such a massive protocol.

Scamming has always existed in crypto, and it will continue on-chain unless some serious regulations occur. But even though scams existed on Ethereum and other chains, it never seemed like the entire system was rigged against retail and degen crypto investors.

Looking back, the only money I’ve made trading on Solana is on SOL tokens and selling airdrops the day I get them. Long-term holding on most Solana memecoins is for idiots and fools. Trust me, I’m bagholding $WIF tokens and a variety of other shitcoins that are down 99%.

Solana will be forced to create some decent projects that provide solid returns to investors. Otherwise, they will extract or have everyone abandon their chain. I know I’m hesitant to invest more money in Solana. There are still some promising projects, and I don’t want to say the entire ecosystem is trash.

How This Benefits Ethereum

While Ethereum doesn’t have the cleanest record, it hasn’t been the casino with 99% rigged slot machines. Institutional money is flowing into Ethereum via ETFs and Real-World Assets, and Layer 2s are growing out of the ecosystem with lower transaction costs and faster transaction speeds.

Is Ethereum perfect? Not even close. But looking back at all my crypto investing, I know I’ve made money investing in projects built on Ethereum and its Layer 2s. I can’t say the same about Solana. In the last cycle, I got hosed by (now worthless) NFTs on Solana, and this cycle has been made up of memecoins. Think of all the money extracted from crypto investors by Pump.fun, a platform 100% dedicated to launching these scam memecoin projects.

I don’t believe this will only benefit Ethereum. I am confident that other Layer 1s can use this as motivation to build innovative and quality solutions for investors and Web3 users. However, I see most of the money flowing to Ethereum from Solana as it has a higher market cap and a more established chain.

You are Reading This From A Biased Writer

I’m not going to pretend to be non-biased in this. This is 100% an opinion piece, and my frustration is getting confirmation from Hayden Davis that this is an organized scam. And learning that platforms are in on it makes me feel even more ill.

I am heavily invested in Ethereum and only slightly invested in Solana. I hold some AI coins and bag-holding (mostly) worthless memecoins on Solana. I tried and paid for bots that (unsurprisingly) failed and paid priority fees to purchase these dogshit scam coins.

Take all of this into account. I have a vested interest in and (perhaps misplaced) confidence in Ethereum outperforming Solana for the remainder of this cycle.

I am also concerned that $MELANIA and $TRUMP tokens were potentially traded on inside information. I don’t see President Trump feeling warm about Solana and his questionable $TRUMP launch when Ethereum has been so good for him. However, this may be my tinted glasses.

Finally, I am disgusted with how FTX investors were forced to sell their $SOL for less than $20, while VCs were able to purchase the same $SOL for $70 when it was trading at $150. Everything related to FTX and Solana gives me bad vibes right now.

Key Takeaways

Everyone has been bullish Solana and bearish Ethereum. In investing, the crowd is often wrong. Investors should zag when others are zigging. Owning Ethereum right now is the ultimate zag play.

Please tell me what you think. Do I sound like a butthurt crypto degen who rightfully lost money in the casino? Am I just being a hater because I bought the wrong projects and didn’t sell during the pumps, like the insiders, KOLs, and scammers? Is Ethereum the same thing, but with higher transaction fees and slower transaction times?

Or do you agree that gambling in a casino where 99% of the slot machines are designed to drain you of most of your money is not the best place to be? Should we keep investing in a place where (supposedly) reputable platforms are guilty of stealing from their users? Does the history of Solana, FTX, and Sam Bankman Fried perpetuate a feeling of mistrust?

Thank you for reading this. As I write this, I see that active wallets on Solana are nearly half of what they were a few months ago. I suspect this is because all the gambling money has been extracted, and now everyone knows the con.

I own ETH, SOL, M3M3, JUP, and WIF, which are mentioned in this article. This information should not be taken as investment advice. I haven’t been paid to write this article. Digital assets like crypto and NFTs involve risk, so you should always perform due diligence before investing.

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