The meme coin world witnessed a shocking development last week. $PEPE, a widely recognized digital meme asset, experienced a massive movement from its main multisig wallet, unsettling its investor community.
Concerning Transfers Spark Investor Anxiety
On Thursday, a whopping 16 trillion $PEPE tokens, which constitute roughly 3.8% of its total supply, were transferred unexpectedly. This transfer targeted several leading crypto exchanges, including giants such as Binance, OKX, and Bybit. The magnitude of this transfer immediately sent ripples of concern through the investor community.
TLDR: They transferred out $15.6M worth of PEPE from the multisig to an EOA address. That address started depositing the funds to exchanges.— ZachXBT (@zachxbt) August 24, 2023
Then they changed the number of signers on the multisig from 5 -> 2 suddenly (bad security choice).
Notably, this was the first occurrence where the project's fundamental multi-sig wallet was used to send out $PEPE tokens. Such a significant move led to predictable outcomes: an uneasy investor community and a decline in the trading price of the meme coin.
Multisig Wallet Protocol Altered
Heightening concerns were the discovery of an alteration in the transaction authentication process of PEPE’s multi-sig wallet. Originally set to demand approval from five of the designated eight wallets (5/8 signatures), this requirement was alarmingly reduced.
Any reason why the PEPE multisig wallet changed the threshold to just 2/8 signatures? Seems weird, this isn't standard right?— CryptoNoddy (@Crypto_Noddy) August 24, 2023
Also, seems that some has been sent to exchanges pic.twitter.com/1DVZIOvef8
On-chain analysts identified that the multi-sig wallet had now made it possible for transactions to be authorized with just two out of the eight designated signatures (2/8 signatures).
Understanding the Meme Coin Phenomenon
Meme coins, such as Pepe Coin, Dogecoin, and Shiba Inu, have been integral in adding a humorous element to the otherwise serious cryptocurrency domain. These coins, deriving their identity from internet memes and cultural references, began as light-hearted takes on traditional cryptocurrencies. For instance, while Pepe Coin owes its origin to the famed Pepe the Frog meme, Dogecoin was born from a jest between creators Billy Markus and Jackson Palmer in 2013.
Despite their seemingly casual creation, meme coins have proven their mettle in the digital asset market. They thrive on the strength of their community and, often, their value escalates based on the robustness of their following.
As we stand on the cusp of this unfolding scenario, questions remain. What motivated this transfer? What are the implications for $PEPE investors and the meme coin industry at large? As the story unravels, we'll keep you updated with the latest developments.