We all know that celebrities’ endorsements can bring in many new users to the crypto sphere. But here's the catch: Davido has been known to promote some doubtful projects before now. And when this is mixed with his pump and dump approach for his DAVIDO token it brings up a lot of issues about predatory behavior. This article will dive deeper into Davido's past, his token launch on Solana and signs that raise questions about him..
Davido and his history of promoting questionable projects
To begin with, let us look at Davido's past. He has been involved in promoting some few investment projects that turned out to be scammed leaving many users heavily losing their money. Here are just a couple examples:
First up is the Racksterli Ponzi Scheme. In 2021, Davido was all about this scheme that promised lucrative returns. Now, guess what? It was nothing more than a Ponzi scheme and many Nigerians lost their hard-earned money in it until it crashed like a pack of cards.
And on the other hand we have the Echoke Ponzi Scheme. Introduced in the same year as Racksterli, Echoke boasted all of the same red flags. Unrealistic profits were guaranteed, but eventually people simply lost their capital.
Wait, there’s more to come. In 2022, Davido joined others in promoting RapDoge crypto coin. Even though this one was actually a crypto project on Binance Smart Chain but it didn’t stop it from causing big losses to people either way; because he went on social media platforms and promoted it till some people hurriedly bought into it then within days later prices crumbled down leaving them bitter.
The DAVIDO Token launched by Davido
Now, let's fast forward to the present. Only yesterday, the Solana blockchain saw the launch of Davido’s token called DAVIDO. And boy! Did he make a bang? He used 7 SOL to buy 20.3% of all the circulation tokens of the DAVIDO project right away. This is quite a large chunk in the beginning which implies that he will have lots of control over what is moving around and as a result might possibly manipulate prices.
And do you know what happened after that? At that point, Davido went on a social media rampage promoting the token like there was no tomorrow. And you know what? Within hours, the price of the token increased by over 200%. His millions and millions followers soon joined in buying them into their bags. Then after a few hours the token price came crashing down with over 56% as Davido began offloading his bags and then sold them out to make profits worth 2,791 SOL from it. As of now Davido’s wallet still has about 43.25 million tokens, making him the largest individual address accounting for about 4.32% of total supply.
Davido’s DAVIDO Token Sale Red Flags
Now, let's discuss the reasons why Davido’s token sale raises initial red flags. Before the DAVIDO launch, he didn’t back already existing and well-known digital currency projects but instead decided to introduce his personal coin right away. This makes one wonder if it was more about a quick money making scheme than genuinely supporting the crypto industry.
Davido made an effort to inflate and drive up the price by purchasing such a vast part of a total coin supply. His fans rushed to buy the tokens leading to price hike which was expected given his massive number of social media followers.
Finally, considering that he is among Nigeria’s most famous and influential celebrities with millions of followers, mostly young people who are not conversant with crypto, promoting DAVIDO token could have misguided the vulnerable ones who are also at a bigger risk of losing their money.
The Pain of Pump and Dump
Let’s dwell on the pain resulting from pump-and-dump schemes. This can lead to confusion and misunderstanding in the crypto space when celebrities like Davido use their fame to promote specific cryptocurrency products for self-gain. Consider this; newbies who trust these influencers end up purchasing these overhyped tokens only to lose all their money afterwards.
Is it any wonder they become skeptical about digital assets at all?
That’s not all. The regulators are now smarter than those celebs and influencers within crypto space. In case they manipulate prices just for their own gain instead of promoting healthy growth, then severe punishments may be imposed by authorities on them. And do you know what that implies? It could cause a decrease in overall adoption rates for blockchain technology.
Finally, it is just outright unfair and immoral when these famous people take advantage of their huge social media followings to tamper with markets. They coordinate buy and sell actions to create an artificial impact. However, a celebrity endorsing cryptocurrency should think about what’s best for everyone involved rather than thinking about quick profits only.
The Way Celebrities Need to Approach Cryptocurrency
Well, it’s important for celebrities to get into the world of crypto. Of course, their endorsement could attract many new people to crypto, but they must act responsibly and honestly as well. Below are some alternative courses that might be taken by celebs:
Before promoting anything though, they need to learn a lot about blockchain technology itself and different projects being worked on therein. This will mean no false allegations.
So instead of joining shady deals meant for quick money making, they should endorse genuine cryptocurrency projects which have long-term potentials at hand.
In case a celebrity has any personal interest in a project or any potential conflicts of interest, such facts must be laid bare. No hidden motives?
Rather than just trying to make a quick profit, teaching their followers about responsible investing would be more important. It is not about the overnight returns but rather longevity.
Lastly, these celebrities can consult with specialists in the industry in order to know how best they can contribute positively without putting users at risk.
Conclusion
To wrap it up, as we looked at the DAVIDO token launch by Davido and how he has been endorsing some rather questionable projects that have left his fans with empty pockets, it brings about doubts if he is taking advantage of his fans for personal gains. Being one of the most respected idols by millions, especially young people, it's a huge responsibility to guide them in the right way and not trick them just for quick money gain.
Certainly, celebrity endorsements can popularize blockchain but this must be done in an objective and fair manner. Influencers need to reach out to the community, understand investor protections and focus on quality long-term returns over gaming the system for a quick buck. Let’s keep it real and be responsible.