This dynamic creates a moral dilemma. Darrien Justice, community manager for Garlicoin, another joke token, says that he would never recommend anyone to buy a meme coin as an investment—including the community’s—for this reason. “Regular investors are the perfect exit liquidity, but they don’t understand it,” he said. “I don’t want people to lose money buying Garlicoin. It’s devastating.”
Lane struggled with the same issue when CumRocket’s value increased. He’s earned enough of his own token holdings to allow him to quit his job and cover the costs of developing a use case, but he feels conflicted about the losses he might inflict on others. do it. “I felt bad about throwing. I don’t want to be selfish,” he said. “If it’s your own chart, it’s your baby. I want everyone to win.”
The tendency of meme coins to rapidly increase in value also creates fertile ground for scam tokens that fall prey to FOMO. By simply continuing the meme coin tradition—by breeding an apathy among investors that stems from a feeling that buying a coin early will lead to riches—even innocuous projects create a cloud. cover for rug pulls and other scams.
Among the many meme coin investors who spoke to WIRED, most said they make an attempt to assess the risk of fraud before buying a new token. But there’s a limit, according to Dyma Budorin, founder of crypto auditing firm Hacken, to how much due diligence a person can do with publicly available tools.
While the underlying code is generally unsophisticated (and therefore easy to check for security flaws or hidden mechanisms for deceiving buyers), little information is available on the distribution of meme tokens at launch . This means that developers can quietly give themselves a large batch of their own coin, which they will later sell in large volume, tanking the price-a textbook pump-and-dump.
“Lack of information creates a huge risk for every meme coin; you can be stiff any second,” Budorin said. “The code may be unique, without any hidden vulnerabilities, but since there is no tokenomics audit, the token will be burdensome.
The creators, for their part, insist that meme coins play an important role by attracting new faces to crypto. Accessible branding, says Lane, creates a route for people who might be alienated by the technical learning curve or the ideological underpinnings of crypto. “Not everybody wins, obviously,” he said, “but that’s the nature of it.”
People who are deep into meme coin trading tend to share the belief that investors should not be hollow, wrapped in cotton wool. Seth Zaraki, a longtime investor in meme coins, says the unapologetic emphasis on profit over utility is part of what he loves so much about meme culture. coin. It’s a refreshing honesty and level of self-control that can’t be found elsewhere in the sector, he says.
Zaraki said he couldn’t stop laughing when he and his wife bought their first meme coin in 2018.
“PEPE is clearly not designed for low-risk investors,” he said. “Many of those who are willing to put money into something like this know what they are doing is gambling. They do it because it makes them feel good.
Ace, who himself once “played” in a fraudulent project, has a similar view. “If as a regular person you put more than $50 into a meme token, you’re an idiot,” he said. “You’re not fit for this shit.”
