“Anyhoo I’m going to go to bed and see you guys tomorrow.”
That was Haliey Welch’s parting words on a now-deleted X Spaces monitored by DL News on Thursday to angry investors seeking redress over her memecoin, which crashed more than 90% shortly after its launch.
Welch shot to online stardom with her “Hawk Tuah” meme. On Thursday, she joined the cast of internet celebrities who have tried to leverage their online clout to launch a memecoin.
Despite the ephemeral nature of cryptocurrencies launched by celebrities, investors piled into Welch’s memecoin, HAWK, which has more than 16,000 holders.
HAWK, launched on Solana, quickly soared to $500 million in market value.
However, the project turned sour for investors as the token’s value crashed below $50 million, less than 30 minutes after its launch, leaving many investors with huge losses.
HAWK’s market value has slumped to $30 million as of reporting time.
Onchain data seen by DL News reveals a pattern of suspicious transactions that bear the hallmarks of a pump-and-dump scheme.
But Haliey Welch and her team deny any wrongdoing.
There has been a wild amount of fud circulating, let us explain:
The main piece going around @X is the 96% cluster seen on @bubblemaps which shows $HAWK tokens being sent by the deployer address (xxxx), to the related addresses, according to the tokenomics that was published.…
— overHere (@overHere_gg) December 5, 2024
Flawed launch
Welch partnered with web3 launchpad overHere to launch the HAWK rather than use a memecoin generator such as Pump.fun that reduces token centralisation risks.
Token centralisation happens on viral cryptocurrency launches. It’s when a cluster of connected wallets capture a large proportion of the token.
Token centralisation almost always leads to large-scale dumping and that’s what happened to HAWK.
The team revealed the HAWK’s contract address before the launch. That allowed savvy traders to programme bots to snipe the memecoin’s launch.
Sniping in crypto involves using bots to front-run human traders to buy a large token supply at cheaper prices.
Welch’s team said they tried to prevent sniping by seeding the token with high fees on Meteora, a Solana-based liquidity protocol.
Still, it did little to prevent massive trading activity by bots.
HAWK was so heavily sniped that 97% of the supply released during the launch was captured by clustered wallets whose buying activity drove the its market value to $500 million in short order.
When these wallets dumped their holdings shortly after, the effect was catastrophic for ordinary traders. HAWK’s market value plummeted instantly to $50 million and continued falling.
Insider activity
Before launching HAWK to the public on Thursday, the team sold 17% of the token supply to a group of investors.
HAWK’s tokenomics lists that portion of the supply as a “strategic allocation.”
Those tokens weren’t vested. Instead, they were unlocked fully upon the memecoin’s launch.
Onchain data from Dexscreener seen by DL News show wallets that have sold a significant amount of the token. Those wallets do not have any buying activity for the HAWK token likely indicating that they belong to insiders who received special allocations.
The activity can be seen by reviewing transactions by wallets in the “Top Traders” column on Dexscreener for the token.
Welch’s allocation, however, is locked for one year.
Still, that’s not the only suspicious insider activity.
The high fees collected during HAWK’s launch on Meteora went directly to the token creator’s wallet. The fees amounted to $2 million.
Welch and the HAWK team claim the creator wallet isn’t controlled by a single entity but rather a Cayman Island-based foundation.
As the dust settles, Welch’s worries may extend beyond disgruntled investors voicing their displeasure on social media as law firms are circling the matter with interest.
Welch may also face heat from the US Securities and Exchange Commission, which has previously gone after other celebrities including Kim Kardashian and Lindsay Lohan.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
