Thursday, February 22, 2024
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The Not-So-Subtle Art of the Meme Coin | wired

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This dynamic creates an ethical quandary. Darian Justice, community manager for Garliccoin, another joke token, says he would never recommend anyone buy a meme coin as an investment — including his community’s own — for precisely that reason. “Regular investors are totally exiting liquidity, but they don’t fully understand it,” he says. “I don’t want people to lose money buying Garliccoin. It sucks.

Lane ran into the same problem when the price of CumRocket skyrocketed. She cashed in enough profits on her own token holdings to be able to quit her job and cover the costs of developing the use case, but felt conflicted about the harm she was causing to others in doing so. “I felt bad dumping. I didn’t want to be greedy,” she says. “When it’s your own chart, it’s your baby’s. I wanted everyone to win.

The tendency for meme coins to rapidly increase in value also creates fertile ground for scam tokens to fall prey to FOMO. Merely perpetuating meme coin tradition—creating a complacency in investors that comes from the sense that buying a coin quickly will lead to riches—even harmless projects create cloud cover for rig bridges and other scams. Are.

Most of the many MemCoin investors WIRED spoke to said they make some effort to assess the risk of fraud before purchasing new tokens. But there is a limit, according to Dima Budorin, founder of crypto auditing firm Hacken, to the amount of due diligence someone can do with available public tools.

While the underlying code is generally unsophisticated (and therefore easy to probe for security flaws or hidden mechanisms to defraud buyers), there is little verified information available on the distribution of Mem tokens at the time of launch. This means developers can quietly mine a large batch of their own coin rewards, which they can later sell in large quantities, tanking the price – a textbook pump-and-dump.

“Lack of information poses a huge risk to every Mem coin; “You can become rigid at any time,” says Budorin. “The code can be great, without any hidden vulnerabilities, but because there is no tokennomics audit, the token can be ruggedized.”

The creators, for their part, insist that meme coins play an essential role by attracting newcomers to crypto. The accessible branding, Lane says, creates a path for those who might otherwise be put off by the technical learning curve or ideological underpinnings of crypto. “Not everyone can win, obviously,” she says, “but that’s the nature of it.”

The people most deeply immersed in meme coin trading share the belief that investors do not need to be wrapped in cotton wool. Seth Jarkey, a longtime investor in meme coins, says that the unabashed emphasis on profit over utility is what he likes most about meme coin culture. They say it’s got a refreshing honesty and a level of self-forgetfulness not found anywhere else in the region.

Zaraki says he couldn’t stop laughing when he and his wife bought their first Mem Coin in 2018.

“PEPE is clearly not designed for low-risk investors,” he says. “Everyone willing to put money into something like this knows that what they are doing is gambling. They’re just doing it because it makes them feel good.”

Ace, who himself was once “played” by a fraudulent project, holds a similar view. “If as a regular person you’re putting more than $50 into a meme token, you’re an idiot,” he says. “You’re not exactly cut out for this shit.”