The memecoin community was in for a shock on Thursday morning when the Memecore (M) token suddenly lost 40% of its value in just two hours. The massive correction immediately sparked rumors of a so-called “rug pull,” a scenario where a project’s developers or large holders dump their tokens and drain all available liquidity, often leaving investors with worthless assets. So, what exactly happened that morning?
Major Drop Caused by Large Sale #
Blockchain analyst Diego D shared the unusual event on social media platform X on Thursday morning. The price of the memecoin was trading at $1.91 early in the morning before it rapidly dropped to $1.21. The decline was the direct result of a large sale.
Meson Finance, a cross-chain liquidity protocol, held a substantial amount of M tokens. On that morning, it moved 15,700 tokens—about 50% of its total holdings—to more than 10 different wallets. These tokens were then subsequently sold on various crypto exchanges such as OKX, Kraken, and Binance, leading to the enormous price correction.
Was It a ‘Rug Pull’? #
The question now is whether the protocol’s action was intentionally a “rug pull.” This is difficult to determine conclusively. There are no indications that the project was intentionally exploited, for instance, by leveraging vulnerabilities in the source code. However, it does appear a coordinated sale took place, which understandably caused significant panic. A true “rug pull” seems unlikely, though the event certainly bore some resemblance to one.
The consequence for current token holders is that they are now sitting on assets that have lost a considerable amount of value. Shortly after the dump, the price did bounce back somewhat, but it still remains far below last week’s levels. The crypto market is known for its sudden volatility with memecoins. This is not the first time such a correction has occurred, and it certainly won’t be the last. For this very reason, the importance of conducting your own research and remaining vigilant in this space cannot be overstated.