The whole crypto community could have hardly imagined that a single promoting post from Argentine President Javier Milie on 14 Feb would end up in a devastated loss of $251 million for over 86% of the $LIBRA coin traders. The now-deleted post by President Javier Milei promoted Solana meme coin, $LIBRA, calling it a tool to fund small businesses in Argentina.
In only a few hours span, the market cap of Solana meme coin reached to $4.5 billion as traders flock in to buy, only to see the coin crashing by 89%. $LIBRA price reached as high as $4.50 since launch to crash to just $0.50!
The Research firm Nansen in its recent analysis has shared that only a small group of insiders, counting to 34, made significant profits for $124.6 million. Further developments since then have already been causing uproar in only the Web3 space but also in the political and legal dynamics.
Nonetheless, with no doubt, the $LIBRA scandal has again put in limelight the vulnerable hype associated with memecoins – highlighting their speculative, volatile, and often manipulative nature. While some tokens like Dogecoin and Shiba Inu have built communities over time, most memecoins are driven by hype and vulnerable to pump-and-dump schemes.
In this opinion exchange with Coingape News Media, CTO S. of Neiro – the token project presented as the Heir and sister of Doge – he shares his insights on the hype trap of memecoins, need of community resilience to save such projects, and how strong governance can prevent rug pulls.
Memecoins have been a hype-based niche historically. As they represent culture and popularity,
their value is largely based on the mindshare that they can capture from the market participants.
Hype, their vulnerability, is also their strength, and it’s what makes them so attractive to
investors and traders,” explains Neiro CTO S.
How to stay cautious from the hyped trap of memecoins?
Recently, apart from $LIBRA scandal, there have been other such instances that have highlighted the artificial hype associated with the Memecoins. In early February 2024, social media influencers pumped MELANIA, leading to a 300% price spike. Within days, the coin crashed, exposing it as just another memecoin playing on political narratives.
CTO S. while guiding says, “what people should watch for is where the hype is coming from and who is creating it. There are many instances where narratives seem to appear out of nowhere, and they are rather forced.
In reality, only a closed group of insiders is generating all the hype, the demand is artificial, and only there to attract exit liquidity from unsuspecting investors. Before jumping in on a memecoin, one should ask, “who is promoting this coin and who stands to gain the most from it?”- only then the quality and intent of the project will become clear.”
The Panamanian company KIP Protocol that launched the $LIBRA cryptocurrency on 14 Feb, have distanced itself from the promoting post of Javier Milie. Julian Peh, Founder of KIP Protocol has argued that KIP Protocol’s involvement was limited to providing technical infrastructure for $LIBRA and that they did not manage or direct the token’s launch. He has stated in the media, “KIP is involved in the project, but our primary role is to help run the fund allocation to the Argentinian companies, and less on the token side.”
Further both Novelli and Terrones Godoy, who facilitated connections between the $LIBRA project and President Milei, has stated they had no access to or involvement with the funds generated by $LIBRA
However, in a contrasting revealtion, in just three hours of the launch, the nine founding accounts profited approximately $87 million, while around 50,000 investors suffered significant losses – making it a significant rugpull of 2025.
Can community resilience save such projects?
Community resilience plays a crucial role in reviving or mitigating the damage of a rug-pulled project, but success depends on several factors. While some projects have survived after rug pulls, most fail due to lost trust, liquidity drainage, and lack of governance.
Offering insights, Mr. S. on efficiency of community resilience says, “this comes back to the question of what is artificial and what is real in terms of interest and demand. A project with real demand and a real community of passionate holders can go a long way, and that kind of environment can be created only when the objective is not just profits, and there is a mission that is greater than personal interest.”
$LIBRA supporters should ask themselves and the leaders of the project for more transparency, and a clear mission that everyone can align for. Then the project might have a chance.”
Role of strong governance in preventing such rug pulls
Not the only the present $LIBRA scandal limelighted such rug pulls as in the past too, we have witnessed such devastating rug pulls too.
The famous token – Squid Game (SQUID) inspired by the hit Netflix show Squid Game skyrocketed over 75,000% in a matter of days. However, investors quickly realized they could not sell their tokens due to a malicious smart contract. The developers vanished with an estimated $3.3 million, making this one of the most infamous rug pulls. The rug pulls that the web3 world has been witnessing in the past and present only highlights the need of strong governance to prevent the investors from such exploitations.
Strong governance ensures cryptocurrency projects adhere to financial laws, preventing fraudulent token launches. Mreover, the KYC/AML checks for project developers helps prevent bad actors from launching scams, just the way SEC (U.S. Securities and Exchange Commission) has cracked down on illegal token sales and rug pulls, discouraging scams.
Offering his own experienced insights, CTO S. shares how Neiro prevented such a rug pull from happening by resilience and focusing on greater cause.
He says, “Neiro is an exciting story of how a project can thrive on the basis of a strong narrative and even stronger and united community. Being the leader of the community takeover of Neiro, after it was abandoned by its deployer, I quickly understood that the Neiro community needed a mission greater than itself, and a focal point that is beyond making a few bucks.”
Therefore, we organized many charity events and managed to attract the support of many people from all around the world. Our objective was always to find community members first, buyers second. This narrative shift allowed us to overcome insurmountable odds, in very rough market conditions, and led to our great success.
Thus, the $LIBRA rug pull and similar scams could have been prevented with stronger governance, better transparency, and stricter regulatory enforcement. By implementing clear legal frameworks, decentralized governance, and security measures, the crypto space can reduce fraud and protect investors from future rug pulls.
The post Milie/$LIBRA Scandal: Neiro CTO S. on Hard Lessons, Community Strength, and the Hype Trap of Memecoins appeared first on CoinGape.
