Almost 25% of tokens launched in 2022 resemble P&D schemes

According to a recent report from Chainalysis, nearly a quarter of tokens issued in 2022 displayed characteristics of a pump and dump (P&D) scheme.

Over 1 million tokens were issued in 2022, but only 40,521 gained enough traction to merit analysis. report.

Of the 40,521 tokens analyzed, 9,902 experienced significant price drops within the first week of launch. This represents 24% of all tokens launched.

According to reports, P&D schemes often start with well-hyped assets and use misleading statements to drive prices up. When a sufficient level is reached, holders will sell their holdings at an overvalued price, causing the price to crash. The report therefore considers the significant price drop recorded shortly after the token’s launch to be a “sign” of a P&D scheme.

25 max first week drop

That said, the report also acknowledges that the token’s price crash could be attributed to market conditions. We examined 25 tokens.

As a result, we found that these projects lacked credibility. Many projects included honeypot coding that prevented new buyers from selling their tokens.

The data points to the same crowd

In many cases, the same wallet provides initial liquidity for multiple tokens, said the report, which fits the P&D criteria of the report. The data shows 445 unique wallets belonging to either individuals or groups, accounting for 24% of the 9,902 tokens similar to the P&D scheme.

The most prolific suspected P&D scheme creators issued 264 of the 9,902 detected tokens in 2022, the report identified.