Categories: Business

What Are Meme Tokens And Why You Should Pay Attention To Them

Doge and Shiba Inu prove that a memecoin can take off. With their values potentially multiplying by the hundreds, or even thousands, blockchain currencies produce an enormous amount of FOMO. What if you invest in the next big thing? This is especially true for crypto tokens, which are common and easy to buy. Obviously, not every coin and token is going to make it. We’re going to clear some things up, explain some terms, and, hopefully, start you off on your crypto career.

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The Basics Of Tokenomics

Unlike mineable coins, tokens aren’t hosted on their own blockchain. Anyone can start a meme token – and many people do, creating a customized smart contract to fit their vision. If you spot a currency with high potential, you can invest. A token’s value depends on its market cap and scarcity. As more people buy in over time, it will go up, and a drop should be expected in the event of a large sale.

Tokens like Shiba Inu and Dogelon earn their success with clear, powerful messages. Right off the bat, their sense of community attracted countless investors. Early holders are rolling in cash, and the roadmaps are stretching far into the future. If you’re searching for a similar project that’s just starting out, Scrooge Token is also worth a look. Despite only releasing by the end of February, it has grown by over 1500%.

This tendency is likely to continue, thanks to the team’s efforts to maintain transparency and good publicity. Due to its high legitimacy, quick progress, ambitious roadmap and intriguing whitepaper, the project is a good example for comparison when choosing your next investment vehicle.

Don’t Lose It All

There’s a scary term you should learn – “rug pull”. A rug pull happens when several large holders pull out of the project. It also applies when the developers take the LP and run. You can win some or lose some depending on crypto rates, but this outcome won’t leave you with a single cent. Luckily, there are precautions that you can use.

Firstly, make sure that the financial backbone of the token – the liquidity pool – is in the right hands. Trust means a lot, but an LP lock is far more reliable. Only go for unlocked tokens if the creators are doxxed. Alternatively, you can use audits to affirm the safety of your investment. The more, the better, and it’s best of all if the reports are open to the public.

The ownership of any token should be more-or-less evenly distributed. Whales are good, but a panic sell from a whale can send the rate plunging. More small holders will stabilize the currency and prevent sharp drops. Being hosted on popular tracking sites is another good sign – check this criterion while you’re looking at the wallet list.

Finally, the public image is the core of any meme token – it’s in the name. Of any given project, think: is it compelling to you? No one can tell how it will be received by the crypto crowd, but you can estimate the effect it has on an individual person. The symbols should be easy to reproduce – it’s important, since major projects rely on contributed art and memes to spread.

Look To The Future

The DeFi space offers incredible opportunities to anyone, regardless of their socioeconomic status and location. They create an alternative to mundane careers and busywork. But there’s also a lot of danger involved, and, much like stock trading, crypto investment can quickly turn into a gambling addiction. Be careful when you step into this strange world – spend only as much as you could spare, even if the potential earnings seem worth the risk. Keep an eye on your money and avoid fraud. Godspeed.