Coinwire research revealed that over 76% of influencers on the X platform had promoted memecoins that are now defunct. According to the report, only 1% of the shilled memecoins had increased 10x in value, and 80% of them dropped by over 70% in the past week.
Coinglass analyzed the performance of over 1500 memecoins promoted by 377 influencers, each with approximately 10K followers and above, to come up with the ‘sobering truth.’ It said that memecoins were considered dead if their value decreased by 90% since their initial launch.
Twitter influencers peddle dead memecoins in crypto scams
Paid KOLs: How Twitter Influencers Promote Dead Tokens and Profit While You Lose
1/ The hype around memecoins hides a harsh reality: 76% of influencers promote dead tokens, and 86% of memecoins lose 90% of their value in just 3 months.
Let's dive into the data. 🧵
2/ It… pic.twitter.com/CCy6Tnc7pt
— Keto (@keto_studio) November 25, 2024
The Coinwire research used Dune Analytics data to gather information on 1,567 meme tokens. The study considered coins that X influencers had promoted over the past three months. The final results revealed that two out of three influencer-promoted memecoins were now worthless, as nearly 86% of them had lost over 90% of their value in three months.
Essentially, 80% of the promoted memecoins lost over 70% of their value in a week, 90% of them lost 80% in a month, and 86% of them experienced a 10x value drop in three months. The report showed that achieving 10x gains with influencer-backed memecoins was nearly impossible as only 1% of influencers promoted a memecoin that gained 10x. It also revealed that only 3% of memecoins promoted by influencers ever reached a 10x increase.
Coinwire research claimed that a large proportion of influencer-driven promotions were setting up crypto investors for failure. The report added that the influencers misled new investors who jumped into the projects without understanding the risks. The data indicated that most investors often lost significantly within weeks of investing, highlighting a pattern of volatility and instability of influencer-backed memecoins.
Research correlates influencer follower count to performance
According to the report, the larger the influencers following, the lower the performance of the memecoins they promoted. The report revealed that influencers with over 200K followers had the worst performance. The report highlighted that the meme coin promotions brought about 39% negative returns after a week and 89% negative returns after three months.
On the flip side, influencers with less than 50K followers had better outcomes, with 25% positive returns after a week. It also showed that their promotions eventually brought over 141% positive returns after three months.
The data suggested that smaller influencers had slightly more genuine promotion practices. It also concluded that larger influencers prioritized financial incentives over the quality of the projects they endorsed. The report showed that influencers earned an average of $399 per promotional tweet, with each post receiving over 15K views. Influencers notably benefited financially from promoting meme coins while investors often faced losses, highlighted the report.
The figures shared highlighted the incentive structure that drove influencers to promote even the ‘most questionable projects.’ For the influencers, the financial benefits were clear, while the consequences for the audiences were not. The researchers noted that the results could be far worse than reported since they were not able to crawl deleted promotional tweets. They added that numerous influencers had taken down most of the promotional tweets that had brought negative results for their followers.
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