Haliey Welch, well known as “Hawk Tuah,” reworked her fleeting viral fame right into a formidable media empire. With a burgeoning social media presence (230K followers on Instagram), profitable model partnerships, and the profitable podcast Speak Tuah, Welch seemed to be transitioning from web character to enterprise mogul.
That was till the 22-year-old launched her memecoin, $HAWK. Now Hawk Tuah isn’t flying so excessive.
$HAWK was launched on the Solana blockchain with appreciable fanfare, initially skyrocketing to a $491 million market cap. This meteoric rise was short-lived, because the coin’s valuation plummeted to below $20 million, in accordance with information from DEX Screener.
The fast decline raises questions concerning the venture’s legitimacy and the motives behind its administration. A now-deleted Twitter Areas dialogue additional intensified suspicions, resulting in widespread allegations that $HAWK is nothing greater than a “movie star rugpull.”
To know what occurred, it’s first vital to look at the construction and decision-making processes that appeared to have underpinned the $HAWK launch.
Launching a memecoin may appear to be a stroll within the park (anybody can do it on Pump.enjoyable). However doing it efficiently is far more durable. It requires capital, advertising and marketing and technical experience alongside one thing good within the first place. You want teamwork. I say this as a founder who’s been in Web3 since 2013, has raised tens of thousands and thousands of {dollars} in enterprise capital for tasks of my very own, and is a enterprise capitalist at a big enterprise fund, Foresight Ventures. (For extra on how one can launch a memecoin, see my different current CoinDesk article right here). $HAWK appears to have had three distinct groups behind it, in accordance with web sleuth Coffeezilla:
- Welch’s Web2 workforce, answerable for her “conventional” model
- Memetic Labs, led by founder Doc Hollywood, managing blockchain-related actions and holding the pen on all Web3 associated choices
- and overHere, a brand new technical service supplier particularly introduced in to facilitate a novel token declare course of designed to onboard Welch’s Web2 viewers.
OverHere initially engaged in discussions with me to offer context about its position and stated it was open to offering something extra in a clear method.
In a since deleted X Areas, Welch abruptly dropped off round 1:00am EST, telling listeners she was going to sleep. Doc Hollywood dominated the dialog. His firm Memetics Labs was answerable for essential features of the token launch, equivalent to tokenomics, token minting and distribution, advertising and marketing (e.g. messaging over major mediums equivalent to X), liquidity pool creation, and buying and selling payment settings.
One listener requested why the buying and selling charges on Meteora have been so excessive (Meteora is a decentralized trade, or DEX, the place customers can commerce cryptocurrencies instantly, with out middlemen.) Doc Hollywood stated lots of the bills have been associated to prices related to overHere’s workforce, in addition to prices related to organising the inspiration within the Cayman Islands. A declare partly refuted by overHere, who maintains it constructed the tech professional bono.
In response to numerous trade sources who have been made conscious of the product’s solely current growth, the social token utility expertise overHere constructed had a brand new conceptual-business mannequin. It’s one that will tokenize likeness and mental property tied to Web2 followers. And it’s not one thing that has existed in prior memecoin launches, not to mention any crypto venture.
Welch’s workforce, seemingly on the recommendation of Web3 adviser Memetic Labs, carried out exorbitant pool charges of 15% on Meteora, a call that drew criticism from overHere after I first contacted on December 4. It appeared to maximise brief time period earnings on the expense of the belief of each Welch’s present Web2 neighborhood, in addition to the Web3 neighborhood she hoped to broaden into with this launch. Excessive buying and selling charges undermine the venture’s credibility.
One other level of rivalry: the sale of thousands and thousands of tokens post-launch by pre-sale buyers, who have been granted unrestricted entry to vest their tokens. This successfully diluted the token’s worth and raised suspicions of insider manipulation.
OverHere maintained its involvement was devoid of economic incentives, claiming no earnings from Meteora or the pre-sale, and no entry to free tokens. It described its focus as establishing $HAWK as a pioneering case examine for leveraging mental property in token launches. Nonetheless, the venture’s trajectory, formed by choices from Welch’s Web3 workforce, was marred by mismanagement and missteps that made that inconceivable.
An absence of transparency emerges as essentially the most vital failing within the $HAWK saga. The absence of a publicly disclosed tokenomics and distribution plan previous to the launch gave rise to accusations that the workforce was insider-dealing. Critics used BubbleMaps, an auditing instrument for DeFI and NFTs, to assert that 96% of the tokens have been allegedly allotted to the “workforce.” overHere later stated the precise distribution for “the workforce” was 10%, which incorporates allocations for the neighborhood fund, reserves, and strategic functions.
In response to overHere’s understanding, the Web3 workforce — which maintained sole deployer pockets entry — has denied promoting these tokens. In actuality, it seems this promoting strain originated from sure pre-sale buyers whose involvement was by no means publicly disclosed previous to the launch. The preliminary confusion underscores a failure in communication and transparency from the outset.
One other situation was lock and vesting mechanisms weren’t instantly carried out, however this delay stemmed from technical bugs throughout the vesting protocol. All discussions concerning the token’s lock and vesting schedules have been managed by Welch’s Web3 workforce in collaboration with Magna, the service supplier overseeing these mechanisms. OverHere was deliberately uninvolved in these choices, emphasizing its position as a technical service supplier moderately than an operational workforce. It has expressed a willingness to offer in depth documentation to make clear its place and duties.
Business specialists equivalent to Ellipsis’ Jarry Xiao have stated they didn’t suppose Welch’s workforce(s) had “malicious intent (this was clearly not their desired final result). However with out proof on the contrary, this seems to be a blatant money seize as a right of the results to retail.”
The story is a stark reminder of the perils inherent in merging movie star affect with the nascent and infrequently unregulated cryptocurrency market. The promise of decentralized finance funding media empires with out conventional fairness gross sales is alluring, but $HAWK exposes the delicate basis upon which such ventures are constructed. The shortage of transparency, accountability, and moral oversight can swiftly remodel a promising venture right into a cautionary story.
$HAWK is a testomony to the essential want for strong governance frameworks and unwavering transparency in Web3 initiatives. Because the workforce endeavors to rebuild belief and redefine $HAWK’s function, we, the crypto trade, should heed this lesson: with out clear accountability and open communication, even essentially the most promising tasks are vulnerable to break down. We have to embed transparency and accountability on the core of all Web3 tasks, notably these of high-profile personalities who can simply as simply change into victims of exploitation.