Exploring the Memecoin Market: Scams, Celebrity Influence, and the Path to Safety

Recently you sharing 91% of memecoins are scams, rip-offs or have vulnerabilities. Could you tell us more about these issues in the memecoin market and what could be causing them?

Creating a token on Solana today is no harder than writing an email. Anyone can launch a new asset using no-code solutions in just a few minutes. You don’t need to have any experience, expertise, or skills.

This creates huge potential for the development of the memecoin ecosystem on Solana – while also being its Achilles heel. When launching a token is so easy, many new assets emerge, most of which are of very poor quality – vulnerable code, weak strategy, and low community engagement.

Some people create bad projects because they don’t know how to do it any other way, but some do it intentionally. While the memecoin market is booming, fraudsters are launching their tokens in the hope of making a profit. Market conditions are favorable for this, while there are no established mechanisms to control this behavior.

• What should cryptocurrency users focus on to identify the 9% of memecoins that are actually worth it?

There are several red flags that indicate that a project is less likely to be a scam. The first two are an established community of several thousand people on Twitter and Discord, and a well-written whitepaper describing tokenomics and token allocation. It is also important to check the number of token holders and the amount of tokens distributed among them. If many tokens are held in only one or a few addresses, this is a potential red flag.

It’s worth considering tokens that are already listed on exchanges. While it’s not a silver bullet, reputable exchanges do some due diligence before listing new assets. Also, check for independent security audits by a credible organization. This is one of the best ways to know if developers can’t technically pull the rug out.

It’s also a good idea to know who is building the project. In the memecoin environment, it’s common for the developer’s identity to be unknown. While this isn’t always a sign of a scam, knowing the team would build trust. That’s why at Memepad, we KYC all token founders to ensure accountability.

• A current trend in the memecoin market is the rise of celebrity-endorsed memecoins. How do you think celebrity influence affects the mainstream image and adoption of cryptocurrencies?

I like the concept of celebrity tokens. Celebrities issue crypto assets to strengthen ties with their fan base, and fans can feel involved in their favorite star’s efforts. At the same time, it allows thousands of new users to integrate crypto, giving them an easy introduction to digital assets. It’s a win-win situation.

Unfortunately, in practice, things don’t quite work out that way. Celebrities often create assets just to make extra money and use questionable methods to promote their assets, while the tokens themselves lack solid use cases. The controversy surrounding celebrity tokens is unlikely to boost the reputation of cryptocurrencies in the public eye.

• What role do celebrities play in promoting questionable projects, and how can this narrative be improved?

Typical promotion of celebrity tokens involves social media advertising and shilling in communities, similar to how other memecoins enter the market. Unfortunately, aside from the way they are promoted, celebrity tokens are often associated with the same scams and controversies seen in the memecoin market. Having a celebrity name in the token’s title doesn’t guarantee that it won’t cause any problems.

Recently, the popular tokens launched by Caitlyn Jenner, an American media personality, and Iggy Azalea, an Australian rapper, have been at the center of a controversy involving Sahil Arora – an influencer who allegedly scammed the stars while launching and promoting their tokens. A few years ago, the SEC fined Kim Kardashian for illegally advertising a dubious project, EthereumMax, which quickly fell to zero.

Malicious people who organize token launches or listings often trick celebrities. These scammers buy up most of the supply before the celebrity promotes the token, and once the promotions start, they get rid of all their tokens.

Celebrities need a more sustainable approach to launching tokens. Professional launchpads with skilled technical and marketing support could make tokens more than just a short-term money-making tool. Assets with strong use cases and secure code can enhance a celebrity’s reputation and provide thousands of crypto novices with a smooth integration into Web3.

Learning the ropes and making the necessary connections takes years: celebrities may not have the time or expertise to delve deeply into the subject. Teaming up with a trusted partner can be a great way for them to navigate the complexities of developing and supporting a memecoin project.

• You suggested that one way to improve the memecoin market would be to create a more secure and sophisticated infrastructure. How could this be addressed to ensure the security and verification of projects among existing memecoin platforms and launchpads?

The memecoin market is nothing but the Wild West, so users need proven methods to identify non-fraudulent projects to invest in. Professional memecoin launchpads could become such islands of safety.

Unfortunately, not all industry players believe in this approach. Memecoin launchpads like Pump.Fun, GemPad, and PinkSale offer minimal barriers to entry, advertise 10-minute token creation and launch, and lack strict verification procedures. As a result, scam projects thrive, as do the risks for investors.

• What are the main benefits for memecoin developers working with launchpads?

Launchpads guide the crowdsale process. They help developers attract thousands of users eager to find a gem to invest in. The community, in return, gets a carefully selected project – with solid tokenomics, successful security audits, and due diligence done for them. It’s a win-win: launchpads help developers find an audience for their launch, and the audience gets a quality project.

• What future developments or features can we expect from Memepad to further improve the security and user experience of memecoins, both for investors and developers?

Our goal is to be more than just a launchpad, but rather an ecosystem where projects, users, and investors communicate and benefit from each other. In this MemeVerse, the community has the opportunity to participate in token launches of proven quality, while projects benefit from enormous growth opportunities.

Recently, we successfully completed a sale of MPAD, the platform’s native token that we will soon launch. The token will introduce multiple use cases for developers and users, balancing the project’s economics and creating a foundation for its long-term growth. We are currently selecting a date to launch the token in the context of the most favorable market sentiment, likely in July. Currently, the team is focusing on product development and strategic marketing to ensure a successful launch.

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