🎓 Memecoin 101
What is a memecoin, how does it work, and why do people lose money? In this lesson, you will learn the rug pull mechanism and critical red flags.
What is a Memecoin?
A memecoin is a cryptocurrency usually based on internet memes or viral themes. DOGE, SHIB, PEPE are well-known examples. But hundreds of new ones launch daily, and most are designed to scam.
Legit Memecoin
✓ Real community support
✓ Transparent dev
✓ Listed on major exchanges
✓ Existed for a long time
Fake Memecoin
✗ Anonymous team
✗ Rapid pump & dump
✗ Social media bot army
✗ Short-lived hype
How Does a Rug Pull Work?
A rug pull is when developers take investors' money and run. The typical scenario:
Token Creation
A token is launched on Pump.fun in 2 minutes. Cost: ~0.02 SOL. Total supply held by a few people.
Fake Community
Telegram/Discord groups are opened. Bloated with bot accounts. Illusions of a 'huge project' are created.
Inflated Holders
Hundreds of wallets belonging to the same person buy the token. Creating the 'thousands of holders' illusion.
The Pump
Coordinated buys artificially inflate the price. '100x opportunity' posts are spammed on social media.
Dump & Run
The developer dumps all tokens. Price drops 90-99%. The project is abandoned.
Danger Signals
Anonymous Developer
Giving money to someone you don't know. Extremely high risk without a verified identity.
Few Holders, High Concentration
Less than 100 holders or the top 10 wallets holding 80%+ supply — price collapses on a single sell.
Extremely Fast Rise
1000%+ rise in minutes right after launch. This is not natural, it's a coordinated pump.
Bot Activity
Accounts constantly posting the same messages on Telegram, mindless RT spamming on Twitter.
No Locked Liquidity
If liquidity is not locked, the developer can drain the pool at any second.
Test what you've learned
Analyze a token you're curious about and uncover its true risk score.
Analyze Token