Concerns are growing within the cryptocurrency community over former New York City Mayor Eric Adams’ newly launched NYC token, as on-chain data revealed a sharp liquidity withdrawal after its launch.
The move prompted some community members to speculate about the possibility of a rug pull. However, the team clarified that the liquidity movements were part of a rebalancing process.
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What is Former Mayor Eric Adams’ NYC Token?
According to media reports, Adams unveiled the “NYC Token” during a press event in Times Square on Monday. The former mayor stated that the proceeds from the altcoin would be allocated toward efforts to combat antisemitism and anti-American sentiment. Adams also announced the launch on X (formerly Twitter).
According to the project’s official website, the NYC Token is built on the Solana blockchain. It has a total supply of 1 billion. At the token generation event (TGE), the circulating supply stands at 80 million tokens.
Furthermore, the project has allocated 70% of the total supply to an “NYC Token Reserve,” and would be excluded from the planned circulating supply.
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Analysts Raise Concerns Amid NYC Token’s Debut
According to data from GeckoTerminal, the token saw a sharp rally shortly after its launch, reaching a market capitalization of over $700 million. The momentum quickly faded, with the price dropping steeply and the market value falling below $100 million.
At the time of writing, NYC had staged a modest rebound, bringing its market capitalization back to approximately $128.8 million.
NYC Token Market Cap. Source: GeckoTerminalNotably, on-chain analysts raised alarms over suspicious activities. Blockchain investigator Rune Crypto alerted the community that $3.4 million had been withdrawn from the liquidity pool, suggesting it was a potential scam.
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Bubblemaps also highlighted “suspicious LP activity” around NYC. A wallet 9Ty4M, linked to the NYC token deployer, created a one-sided liquidity pool on Meteora.
At the token’s peak, the wallet removed approximately $2.5 million in USDC. It then added around $1.5 million back into the pool after the price had fallen by roughly 60%.
The platform suggested that the situation surrounding the Solana-based token echoes issues observed with the LIBRA token. This raises questions about transparency and investor protection in politically linked cryptocurrency projects.
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Besides liquidity issues, analysts flagged severe centralization. Crypto analyst Star Platinum warned about the project’s centralized structure and the risks it poses to retail holders.
Nonetheless, the project addressed the flagged on-chain activity by attributing the liquidity movements to what it described as a rebalancing process.
Going forward, the evolution of the NYC Token will likely depend on greater clarity around liquidity management. Continued on-chain monitoring and transparent communication from the project team may help address community concerns as the token’s market activity develops in the coming weeks.
Source: https://beincrypto.com/eric-adams-nyc-token-liquidity-centralization/
