How to Avoid Memecoin Scams: Lessons from Pump.fun and the Degen World
Memecoins are hot, but here’s the reality: 99.9% of them are scams. Yet, some degens (a.k.a. highly speculative crypto traders) continue to profit in this risky world. How? They’ve mastered spotting real gems. The good news? You can too, by avoiding just one common mistake.
In this Article, I’ll break down the memecoin ecosystem on Pump.fun and expose how these scams happen.
🧠 Understanding the Memecoin Market on Pump.fun
Right now, Pump.fun dominates the memecoin trading space, boasting $150 million in daily trading volume. With the second meme supercycle in full swing, Pump.fun has become the primary platform for degen traders. The platform’s founder has even made 1M SOL in fees!
🚩 Common Memecoin Scams: How Degens Get Tricked
Let's walk through the scams and tactics. Here’s a snapshot of the numbers:
SCAM ALERT: BILLIONS LOST 💸
Sadly, 99% of shitcoins launched on Pump.fun turn into rug pulls. To visualize the damage:
Tokens Launched: 2.7 million
Average Liquidity per Token: $6,000
That’s roughly $16 billion spent just on token creation! And when we factor in money spent on buying these coins, the losses climb even higher. Scary, right?
The Survival Rate of Tokens 🧪
A tiny 1.4% of tokens make it to platforms like Raydium and DexScreener, but don’t get excited yet. Even those that “survive” tend to be scams. In fact, a study reveals that 90% of tokens that last are scams. You can check this for yourself by filtering tokens by age on DexScreener—don’t be surprised if 9 out of 10 are rug pulls.
The Bot Game 🤖
Scammers rely on bots to execute these schemes. Here’s a basic breakdown:
Step 1: A scammer transfers SOL from a CEX or mixer to a fresh wallet to hide any connection to their main wallet.
Step 2: They distribute SOL across tens or hundreds of bot-operated wallets.
Step 3: With bots at the helm, a new coin is created, marketed, and rug-pulled in minutes.
🔑 Key Takeaways to Avoid Getting Scammed
DYOR (Do Your Own Research): Never blindly follow trends. Dig into a token’s history, team, and community before investing.
Avoid New Tokens on Pump.fun: The platform is ripe with scams, and it’s difficult to filter out legitimate tokens from the pump-and-dump schemes.
Spot Red Flags: Tokens that pump rapidly or have unusual transaction histories are often scams.
Follow Reliable Sources: Stay updated with insights from experienced traders like @Crypto PM for tips on safe trading.
Wrap-Up: Stay Smart, Stay Safe
Memecoins are tempting but risky. By learning the common tricks of scammers and keeping an eye out for red flags, you can make safer investments. Remember, the goal is to profit without falling victim.
That's it for today folks,
Thanks for reading! For more insightful crypto content,
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