Is Davido Coin Another Crypto Scam?

On Wednesday, May 29, Afrobeats superstar Davido launched a new cryptocurrency called “$DAVIDO (Davido Coin), a crypto token or memecoin, marking his third foray into the digital currency space.

The launch of was accompanied by a social media promotion from Davido and a welcome tweet from Solana, a blockchain platform.

Davido Coin showed promising signs on Wednesday night, gaining a significant market value of $10 million within hours on the Solana blockchain.

However, the excitement was short-lived as the Coin’s value plummeted by 90% by Thursday morning.

ALSO READ: Davido Strikes Gold, Earns $474.4K from Token Sale in Hours

Despite this high-profile backing, the practical uses for Davido Coin were vague, linked only to an unspecified website and a Telegram group. This lack of clarity contributed to growing skepticism about the coin’s long-term viability.

The rapid devaluation of Davido Coin has raised alarms about a potential “rug pull,” a type of scam where developers abandon a project and flee with investors’ funds.

This scenario is commonly seen in the crypto world through “pump-and-dump” schemes, where the value of a new coin is artificially inflated before the initial backers sell off their holdings at a high price, crashing the value and leaving new investors with losses.

The Warnings Signs

As Davido Coin began its downward spiral, several cryptocurrency enthusiasts and analysts quickly pointed out suspicious activities.

Notably, the wallet that created Davido Coin had sold off a significant portion of its holdings, cashing out around $200,000 within a few hours of the launch.

This rapid sell-off further fueled doubts about the legitimacy of the Coin and the intentions behind its creation.

The pattern observed with Davido Coin is reminiscent of many meme coins, which often experience sudden surges in value followed by sharp declines.

While some promoters of these coins structure them to allow a fair chance of profit for a broader range of investors, the setup of Davido Coin seemed to favour early profits for its creators at the expense of later investors.

Davido’s Crypto History

Davido‘s history with cryptocurrencies includes several ventures, each with varying degrees of success and controversy.

His first project, $echoke, aimed to connect fans with unique entertainment experiences but quickly faded into obscurity.

Another venture, Racksterli, ended up embroiled in a Ponzi scheme scandal, costing users significant amounts of money.