Memecoin Scams: Gen Zs' Ponzi Schemes

Few people buy memecoins as an investment, and if you do so please reconsider your financial choices. Memecoins are high risk, volatile assets that are more akin to gambling than investing. I have bought into many different memecoins so that you don’t have to, and, in this article, I will outline memecoin red flags and their value proposition. Notice how I said bought into and not invested, memecoins are not investments. I have bought several memecoins that went to zero as soon as I bought them. I have also bought memecoins, like JD Wance, that I sold for 800% profit, so take everything I say with a grain of salt.

First off, what the heck is a memecoin? A memecoin is a cryptocurrency that has no clear financial or social benefit. Anyone can easily create a memecoin on pump.fun. So why would anyone buy a memecoin? The same reason that people gamble: It’s fun and the possibility of high returns.

Now this article isn’t meant to discourage you from buying memecoins. If you think about memecoins in the same light as gambling, and don’t bet your life savings on it, then have your fun. Otherwise, I highly encourage you reconsider your position.

Now, if you’re going to buy memecoins — this is NOT financial advice — you might as well know how to differentiate the scams from the next Dogecoin, which, at the time of this article, has a market cap of 25 billion dollars.

First, you must choose your method of buying memecoins. You can choose Moonshot, Binance, or my personal favorite Hype -- if you need an access code then, shameless plug, set up an intro meeting with the title HYPE Code, and I can help you get set up —> KBCrypto.io.

Next, familiarize yourself with your app of choice and do your research on the memecoin you’re looking to buy. If you want to do a quick scan, investigate the following Stats (Hype makes looking into these super easy):

DEX Status: "Paid" indicates that a transaction, trade order, or the associated DEX fee has been successfully processed. Think of it like a verified blue checkmark on social media—it signals credibility. When a project pays the DEX fee, it usually reflects a level of commitment from the developers, suggesting they believe in the long-term viability of their crypto asset. On the other hand, if a project avoids paying this fee, it could be a red flag—implying that the developers may lack confidence in their product and could potentially be planning a rug pull (suddenly selling off large amounts of their token and abandoning the project).

Dev Holding: This is true if the developers of the cryptocurrency own any of the crypto. This is bad since if the only people that own the crypto, or people that own a majority of the crypto, are the developers, then rug pull are easy, and you are essentially paying the developers of the crypto when you buy the memecoin.

Tax:

• buy tax: a tax percentage on your buy order of the crypto

• sell tax: a tax percentage on your sell order of the crypto

• transfer tax: a tax percentage when you send the crypto to someone

Why do these stats matter? HAWK TUA coin received high taxes on buy, sell, and transfer tax which is how they stole millions from their fans.

Can update fees: this is self-explanatory but why does it matter? If you can update the fees, then the above stats will look good when you buy the crypto and then 5 minutes later the stats can become red flags.

Liquidity: the amount of buy orders for the crypto. When you buy a cryptocurrency there is someone on the other end selling you the crypto so if there are a lot of people buying then it will be relatively easy to sell that crypto and there is high liquidity. If there is low liquidity, then fewer people are buying that crypto and you may have some trouble selling. In this case, consider raising your slippage tolerance, we will talk about this in a future article!

Keep in mind that even if all the stats above seem positive, you can still get scammed and the crypto can crash to zero. I can’t iterate enough that this is NOT an investment, it is essentially gambling or at best investing in social capital - as in the instance of Hawk Tua coin which, as you may know, still ended up crashing to zero. If you’re interested in learning why HAWK TUA crashed, please like and share the article!

Don’t be tempted by get rich quick schemes in memecoins. There is plenty of growth left in less volatile assets like bitcoin, Ethereum, and Solana - not financial advice. We are just at the beginning of the crypto revolution.

Thank you for reading the article and don’t miss out on the articles to come by subscribing to the page!