Memecoins: Epitomizing Decentralization

What memecoins are, how to get into them, basic strategies, risks and rewards, and why i think they level the crypto playing field.

Let’s be honest: HODLing is for people with big capital.

If you have 1 or 2 SOL — or even less — you really don’t have the luxury to hold Solana until it reaches $1k, right? So, what’s the next viable option? Memecoins.

You’ve probably heard about them. It’s impossible not to hear about this new gambling meta if you’ve been around the cryptocurrency ecosystem for a while. At the very least, you might have come across huge PnL screenshots on Twitter, Discord, Telegram, or any other crypto-friendly social media platform.

This article aims to demystify the memecoin culture for you and, hopefully, help you make your first profit. Here is a table of contents outlining what we’re going to cover. This table of contents serves as a reference to help you easily find information in the future.

SO, lets get started…

What Are Memecoins?

➥ Definitions and characteristics.

As the name implies, memecoins are highly speculative and volatile cryptocurrencies primarily created and traded for the sole purpose of making a profit. Although, some communities also embrace them for their cultural or social aspects. They are often driven and sustained by a culture of humor, memes, fun, hype, trends, or narratives and they are arguably the fastest way to get rich — and the easiest way to go broke — in the crypto space.

The future of all cryptocurrencies is speculative and volatile, but nothing comes close to memecoins in speculation and volatility. It is so risk-oriented that active memecoin traders are termed “degens,” which is just a short form of a degenerate.

Unlike cryptocurrencies like Bitcoin, Ethereum, and Solana that have utility or pactical use cases and are mostly used as a store of value in the cryptocurrency space, memecoins are known — or argued — to have no utility, except, of course, the utility of profit. But then this leads me to our next sub-topic that’ll try to explore the validity or invalidity of these claims.

The History Of Memecoins

➥ Its Evolution on Ethereum and Solana.

As fitting as its history may be, Dogecoin — the first known and recognized memecoin — was created and launched as a satirical coin to mock the hype surrounding the crypto market and the often overly serious nature of crypto discussions. It was meant to be fun and taken less seriously, in contrast to existing native and technology-focused cryptocurrencies like Bitcoin.

Since a satirical coin could not be launched on existing blockchains at the time, Dogecoin was launched as its own blockchain in 2013, well before Ethereum in 2015 and Solana in 2020. But while Dogecoin’s rise was fueled by memes, community hype, and Elon Musk’s tweets, blockchains with actual utility, like Ethereum and Solana, helped grow the broader crypto scene that memecoins thrive in today.

Ethereum, in particular, ushered in a new era of cryptocurrency with smart contracts, and this eliminated the need to launch your own Proof-of-Work blockchain before creating a memecoin — or any coin at all. The growth and advancements of Solana played its own role in the memecoin culture by making it even easier to create a token. In fact, it’s so simple that you can launch your own token with just 1 SOL. Here is the history of the first memecoin on Solana./p>

Below is a dashboard showing the total market capitalization of memecoins, as well as the top meme coins by market cap. Dogecoin holds the 7th spot, remaining relevant and profitable for 11 years — longer than most utility-focused coins have survived. Claims that memecoins have no utility are, at best, far-fetched./p>

Think about it: when non-crypto natives hear the words “crypto” or “memecoins,” the first thing that probably comes to mind is “token goes up; profit, token goes down; loss.” Memecoins perfectly embody that concept, which is likely why they’re so popular. But let’s explore the facts.

Why Are Memecoins So Popular?

➥ Factors driving their appeal.

After the insane and extremely profitable run of Dogecoin, the charity donations, combined with the accessibility of Ethereum’s smart contract technology, new memecoins began springing forth. The notable one after Dogecoin was Shiba Inu, which was actually inspired by Dogecoin and famously meant to be the “Dogecoin killer,” although, as the numbers show below, it is yet to achieve or sustain that status.

With Shiba Inu came many others like Floki Inu (FLOKI), which was actually inspired by Elon Musk’s dog. Then came Pepe (PEPE), Bonk (BONK), and as of now, it is literally impossible to keep count of memecoins being created every day in the cryptocurrency space. So, what led to its rise? Why are they so currently popular and engaged with?

Let’s explore some of the factors ↡

Increased Memecoin Diversity: There was, and there still is, a new wave of memecoins, with each one trying to capture the viral success of Dogecoin and Shiba Inu. Examples include Pepe Coin, Bonk, Dogwifhat, and Chill Guy, among others. These coins often leverage similar strategies like viral marketing, community engagement, humorous and fun branding, and sometimes celebrity endorsements to gain traction.
Cultural Impact and Community Building: Memecoins naturally became a significant part of crypto culture, emphasizing the power of community and internet memes in driving value. This development eventually highlighted how memecoins could build strong, dedicated, fun and engaging communities, which are often seen as key to any memecoin success.
Market Speculation and Volatility: The memecoin market became known for its high volatility, with many coins experiencing rapid rises and falls in value. Now, this attracted a mix of investors looking for a quick cash grab and those also interested in the cultural phenomenon. The market saw numerous coins being launched daily, many of which did not last long, creating a sense of chaos and opportunity in the space. What better source of adrenaline for most?
Utility and Ecosystem Development: While alot of memecoins started as pure speculative assets, some, like Shiba Inu, attempted to integrate more utility through projects like ShibaSwap, aiming to become part of broader DeFi ecosystems. Dogecoin charitable efforts outside of crypto contributed to it’s popularity. This was seen as a strategy to provide more than just meme value, potentially adding longevity to the coin’s appeal and its community at large.
Influence of Celebrity Endorsements: The role of celebrities in driving memecoin popularity continues to be significant and cannot be ignored. This is because high-profile endorsements, like those from Elon Musk for Dogecoin, played a crucial role in the memecoin narrative, but this also raised concerns and brought scrutiny regarding the possibility of market manipulation.
New Platforms and Innovation: The success of Dogecoin and Shiba Inu spurred innovation in how memecoins could be launched and marketed in and out of the crypto space. When the Solana memecoin culture started taking off, platforms like Pump.fun, launched in January 2024, became a forerunner for launching new memecoins, with substantial revenue generated from these activities.

A Beginner’s Guide to Trading Memecoins on Solana

➥ Step-by-step instructions.

I’m going to go over two ways to trade Solana memecoins that I’m pretty familiar with. The first one is trading with Pump.fun, the OG memecoin platform, and the second is trading with BONKbot, a Telegram bot that gives you a speed advantage. Keep in mind, you can trade memecoins on other blockchains like Ethereum, BNB, and even recently, TON. I’m focusing on Solana because I consider myself a native here.

Trading With Pump.fun

To Buy

First, you’ll need to download a Solana-compatible wallet. I recommend Phantom — it’s available on all devices.
Set up your wallet and securely store your seed phrase on a physical medium since digital storage isn’t recommended.
Next, open your mobile phone or PC browser, type in pump.fun, and hit enter. You should see something like this. ↡

Now, connect your funded Solana wallet. You can add funds directly through the app or use exchanges like Binance, Bybit, or OKX.
The animations on Pump.fun can be pretty annoying or even triggering, so I recommend turning them off.
Click on any memecoin that catches your eye. This will take you to the token page, where you’ll find details like token info, charts, graphs, social handles, and more.
Right next to those, you should see an option to buy. If you’re on mobile, the buy button is actually the “trade” button you’ll see at the bottom of your screen.

Enter the amount you want to buy in SOL and place your trade. Check the bought memecoins in your wallet.
Then, either celebrate your profit or (i don’t recommend) mourn your loss after a few seconds or minutes.

To Sell

Switch to the sell option right next to the buy button.
Specify the amount you want to sell.
To prevent your transaction from failing due to the high volume of buys and sells happening every minute — which could affect your quoted price versus the actual sell price — set the slippage to 10% or 15%, depending on the situation.
Slippage is the amount you’re willing to forgo to ensure your transaction goes through successfully.
You can find the slippage setting just above the field where you specify the amount you want to sell.

After setting slippage, click on place trade and confirm sell.
Check your wallet for the sold tokens.

Trading With BONKbot

To Buy

Download Telegram if you don’t have it already.
Head over to Twitter (now X) and search for @bonkbot_io, or just click this link.
In their bio, you’ll find the correct and authentic link to the Telegram bot. Correct and authentic is key because scam versions exist, which is why I recommend going to their official Twitter page to get the right link.
Click the link, and it’ll take you to the official Telegram bot.
Once there, click the Start button.
Accept the terms of use, and you should see something like this. ↡

Your wallet address is the one with the “tap to copy” option next to it. Copy it and fund it with your desired amount.
Click on the “Refresh” option to view your balance, or you can use the familiar method by clicking the “Wallet” option.
From the new options, click “Export Seed Phrase.”
Your seed phrase will be provided — copy it, go to your Phantom wallet, click “Add/Connect Wallet,” and select the “Import Secret Recovery Phrase” option.
Paste the recovery phrase and click “Import.”
You should now see your funds.
Next, find the contract address of the Solana memecoin you want to buy and paste it into Bonk Bot via the message box, then click “Send.”
You should see something like this. ↡

You’ll be given three options to buy: “Buy 1.0 SOL,” “Buy 5.0 SOL,” and “Buy X SOL.”
The “Buy X SOL” option lets you specify the exact amount you want to use to buy the memecoin if you’re not going for the 1.0 SOL or 5.0 SOL options.
The purchased memecoins will automatically update in both your Telegram balance and your Phantom wallet — fast and easy.

To Sell

Click on either “Sell 50%” or “Sell 100%.”
For a specific amount, click on “Sell X%” to input the amount you want to sell.
Check your wallet to see your coins.
Congrats! You are now a certified degenerate!

Strategies for Trading Memecoins

➥ The DOs and DON’Ts.

To become profitable in trading memecoins, you MUST have a strategy — unless you’re just a chill guy who loves losing money. Here are some strategies that might be helpful:

First Things First: Losses Happen

No matter what strategy you use, you’re going to take losses. The trick is figuring out what you’re good at and what helps you lose the least.
And remember: there’s always another play waiting, so don’t get stuck up or overly emotional.

Basic Rules to Keep You Sane

Set Rules: Know your limits and stick to them.
Mental Stop Loss & Take Profit: Have a clear idea of when to cut your losses and when to take your profits. Don’t wing it.
Don’t Fall for Traps: Don’t double dip (selling a coin, then FOMO-buying it back because it went higher). Don’t rotate (leaving a play you believe in just to ape into something shiny and new).

Teamwork Makes the Dream Work

Don’t Go Solo: Trading alone can be rough. Get into a good group — it’s worth paying for if you have to. A group can help you with research, tools, and first-hand info that give you an edge.
Do Your Research: Use tools like the bubble map on pump.fun to check if devs are holding tokens in multiple wallets to manipulate you. It’s brilliant.

Winning, Losing, and Everything in Between

Balance is Key: Be okay with losing. Be okay with winning. But don’t be okay with losing more than you win. If you’re not winning enough, change your strategy.
Stay in the Game: Don’t stop clicking. You could lose 10 times in a row, but your next move might be the one that pays off big.

SCALPING

Scalping is a popular method for trading memecoins.
It involves quick entries and exits. Use all the rules and tools above to refine this approach. Scalping works if you’re fast and disciplined.
Try to adhere to all the rules above to keep your trades profitable and avoid unnecessary losses.

Risks and Rewards of Trading Memecoins

➥ What to expect.

It’s really simple. You are trading a highly volatile financial instrument known as crypto, so expect to get extremely rich or extremely poor. But aside from the financial gains and losses, the community and network that sustain most of these memecoins can sometimes prove to be invaluable. As most degenerates will say after suffering huge losses: maybe the real profit was the friends we made along the way.

The Impact of Memecoins

➥ In and Out of the Crypto Space.

Talking about impact, there have been a couple of sectors where memecoins have had both positive and negative effects, which I feel deserve a highlight or mention. Should we start with the negative side? Hmm, I think we should. The first obvious impact of memecoins in the cryptocurrency market is the effect they have on the overall integrity of the cryptocurrency market.

I’ll just go ahead and list three factors that contribute to this:

The increased risk of scams, facilitated and heightened first by developers rug-pulling a project after the price hits a certain ATH (All-Time High), and second, by the alleged lack of utility or fundamental backing associated with these memecoins.
Memecoins are very susceptible to market manipulation — a phenomenon where the developers, insiders, or whales of a memecoin can easily and significantly fluctuate the token’s price due to their concentrated token distribution, leading to new entrants into the market becoming exit liquidity for them.
It can be argued that the proliferation of memecoins in the cryptocurrency space can take all the spotlight, leaving actual tokens and blockchain technologies struggling, potentially hurting the perception and longevity of the crypto space. If memecoins become the poster child for crypto, the industry may be viewed more as a speculative ecosystem than as a technological advancement.

But here’s the good news — there’s actually a positive side to all this. Memecoins have done quite a lot to boost cryptocurrency adoption worldwide. Elon Musk, for example; his tweets about Dogecoin brought tons of attention to the space. Or consider the countless times memecoins have been used to donate to various charitable causes, helping the efforts to solve real-world problems like cancer and other rare diseases. The humor, low cost, and ease of getting involved made it fun and approachable for people who might not have cared about crypto otherwise.

And what happens when all this new attention is brought into crypto? Significant liquidity is also introduced, which will naturally increase the trading volumes recorded in the cryptocurrency space, thus attracting even more attention and investments.

And what happens after all these new investments come in? Innovation will become the next meta, as developers and entrepreneurs will be motivated to create new and exciting crypto-related projects and decentralized applications, making the cryptocurrency space even more advanced and technology-oriented.

More collaborations outside of crypto will emerge, as most memecoins are visually and narratively appealing enough to stand out as a brand or product of their own, as exemplified by one of my favorite memes: WEN.

So, what do you think? Does the positive impact outweigh the negative, or does it negate it? Here’s what I think. ↡

Personal Thoughts & Summary

➥ Reflections and takeaways.

From my own unique perspective, I think memecoins are necessary, at least until something better is invented. They’re necessary because they embody the true essence of a decentralized system, where opportunity is evenly distributed regardless of your economic or social standing.

Without memecoins, how can you profit from trading as a low-capital trader? You’ll definitely be crushed by the bigger players. But memecoins level the crypto playing field — anyone can make a profit, and anyone can become the next big trader.

This, along with the other positive aspects of memecoins mentioned above, brings me to the conclusion that the positive sides of memecoins definitely outweigh the negatives.

So, what are the key takeaways here? Memecoins have a history, they have a technological foundation, and they are gaining more and more traction every day. You can definitely take advantage of this and be highly profitable if you start with a strategy that works best for you.

And I dare say: A meme a day keeps financial insecurity away!

Disclaimer: The information provided in this article is for educational and informational purposes only and should not be considered financial or investment advice. Cryptocurrency trading, including trading memecoins, carries significant risk, and you should always do your own research and consult with a qualified financial advisor before making any investment decisions. The opinions expressed here are solely those of the author and do not guarantee any financial results.