Home Editor's Pick Ape Terminal Founder Hassan Hatu Sheikh Speaks Out on Crypto’s Latest Craze

Ape Terminal Founder Hassan Hatu Sheikh Speaks Out on Crypto’s Latest Craze

by

The crypto market has been getting crazy hot for the last couple of months. The mania was further exacerbated over the last couple of weeks as meme coins went off. But what has been interesting about this round of meme coin frenzy is the new and unique method of token allocation called presale.

This mania took place on Ethereum competitor Solana. Surprisingly, Solana wasn’t known for meme coins until recently when tokens like Bonk (BONK), MAGA Coin (TRUMP), and dogwifhat (WIF) attracted billions of dollars in investment.

The popularity of meme coins ignited a meme coin frenzy on Solana. Then came the success of Book of Meme (BOME), which raised funds through a pre-sale and achieved a whopping $1.6 billion in just a few days, rallying more than 36,000%. In a surprising turn, BOME soon found its way onto prominent crypto exchanges like Binance and Huobi.

The wild success of the BOME coin led to the release of various random projects that received significant funding. These include Nostalgia (NOS), Slerf (SLERF), Nap (NAP), and many others that raised money via this new, controversial presale model. The soaring hype over presales saw an AI-driven application raise a whopping $30 million in a matter of 30 minutes.

Well-known blockchain sleuth Zack noted in a post that in a matter of just over a week, the Solana community has collectively invested more than 655,000 SOL worth about $122.5 million in 27 presales. While calling attention to accounts of “grifters” who are taking advantage of the crypto community, he shared:

“This is only counting presales on Solana and the number is excluding presales happening on other chains (Ethereum, BSC, Base, etc).”

The Controversial World of Presales

In a presale, investors send tokens to a specific wallet address. These addresses are heavily promoted on X (formerly Twitter) to allocate a certain number of tokens to investors based on their investment amount once the token officially launches.

While this new way of fundraising and token allocation is gaining a lot of traction and turning out to be profitable for many, this process isn’t really safe.

For starters, this method does not guarantee that sending money to a designated wallet will actually give the participants tokens. It may even turn out to be a complete scam, or the person in charge may end up rugging the project, which means that while the investor sends money to the wallet, they may never get any tokens in exchange. There’s also the concern that the tokens received from the presale would be different than what was originally promised.

Furthermore, these projects have inherent liquidity concerns and can also negatively impact the established tokens, ultimately harming the entire ecosystem. The very uncertainty of this fundraising approach is what makes this an attractive avenue for fraudsters and scammers to exploit investors.

Raising a Flag

Despite the apparent success of the presale model, many have raised questions. Addressing this, Anthony Sassano, an Ethereum educator, and angel investor, pointed out that during the last bull run two years ago, people engaged in similar activities, and now, “everyone is right back to bidding on ponzis.”

“Sending money to a “memecoin presale” that has a 99.9% chance of rugging is actually just dumb as hell,” he added.

With this trend of handing over funds in return for a promise, raising millions of dollars doesn’t require a working product anymore or even a white paper or future plan. In fact, some projects have nothing more than a meme picture, and some even don’t have that.

“It’s just bull market things,” said Hassan Hatu Sheikh, the founder of crypto launchpad Ape Terminal. “FOMO is driving the massive funds being sent by unsuspecting investors to these wallets as people see others get rich and then themselves want to get rich quickly without giving a thought to the risks involved. They just want to get an opportunity to be early. These methods are simply unsustainable, and in due time, investors will come to realize this, and we’ll see the market shift to more effective, democratic, and safer approaches.”

This makes sense as bull markets tend to induce extreme degeneracy among crypto market participants with the promise of huge profits and success stories like turning a couple of thousands of dollars into millions being flashed on X (Twitter).

As Hatu Sheikh noted, the market will return to balance once this frenzy ends. However, concerns regarding bad actors weaponizing this method and Solana’s passionate community to steal money from unwitting investors are valid, and we must endeavor to work towards following better practices in the industry.

The post Ape Terminal Founder Hassan Hatu Sheikh Speaks Out on Crypto’s Latest Craze appeared first on Blockonomi.

You may also like