Doge, a Shiba Inu dog, is paired with bright fonts and infantile words like “such awe” and “extremely concerned” in the Bitcoin community’s favorite meme.
Meme coins, or digital currencies named after online jokes or pop culture references, were born in December 2013 when Dogecoin, a parody cryptocurrency, was released.
An explosion of dog-themed cryptocurrencies followed the invention of dog-themed dogecoin, leading to the proliferation of dog-themed cryptocurrencies.
It is now possible to categorize dog-themed coins within the Meme Coins subcategory. Dogecoin and its variants Shiba Inu and Dogelon Mars are well known to most retail investors, who have witnessed a significant amount of speculation around this new subcategory of hoax coins in 2021 and is the main factor behind the rise of these coins.
Pepe Cash, based on the Pepe the Frog character, and HODL (hold on for dear life), from the crypto craze to hold on to your coins at all costs, even during a market downturn, are two other meme currencies outside of the coin specialty with a dog motif.
Tips to safely invest in meme coins
Those familiar with the crypto market know that the reputation of a product or platform is an important consideration when considering its feasibility. Consequently, it is important to learn about the key team members on the project and their background. It can be difficult to find out who the members of the development team are as they have chosen to remain anonymous.
You should be aware of meme currencies when a single entity controls a large part of the total supply. If a major token holder decides to sell (sell off) their coins, the value of those digital assets will likely decline.
It is also worth mentioning that those investors who want to get even more meme coins and invest their money in the mentioned digital assets mostly play at online crypto casinos. The main reason is that investors can earn even more meme coins by using crypto casino gambling. As a result, the demand for this type of casino is increasing. In order not to play with scammers, you should read the crypto casino review, where you will get more information about how it works, the license, the games offered and other important insights.
Up to 250 meme currencies are currently competing for the interest of crypto investors. At least a hundred of them have the word “inu” in their names. Many meme-inspired cryptocurrencies may appear authentic, but in reality they are scams aimed at exploiting the fast-growing meme coin craze. Rug pull fraud can be avoided, lowering the stakes for your business.
A rug pull happens when development teams abruptly dump all of their coins, causing the price to skyrocket. When a coin’s value drops to zero, investors lose everything they invested. Snow Puppy and Squid Token are two recent cases of meme currencies ending in an alleged rug pull. One or two investors or the entire development team could become dangerous when it comes to meme currencies. For this reason, make sure that no one person or group owns more than 5% of the token supply.
Automated market makers distribute meme currencies (AMM) in most cases. New liquidity pools are created for investors to take advantage of when a coin is first launched by the development team. Smart contracts, known as liquidity pools, allow investors to trade cryptocurrencies without the need for an order book or counterparty to be maintained by a third party. For example, liquidity pools allow investors to exchange Ethereum (ETH) for a new Ethereum-based token. For this, liquidity must be provided by the development team. Both ETH and part of the meme currency are stored in a liquidity pool.
To get hold of the freshly issued currency, innovators would trade against that liquidity.
The development team can be deprived of liquidity if proper security measures are not taken. Investors have no way of exchanging coins, which quickly lose value in such situations. You should only join pools that have burn addresses (wallet addresses beginning with oxoooo) as this indicates liquidity is frozen forever.
What are the risks of investing in Meme Coins?
Investing in Dogecoin and other meme currencies like this carries some risk, even if these projects seem light-hearted.
If the price per coin increases by thousands of percent in a few days, it signals to others that they may be able to benefit from the appreciation of the meme currency.
As a side note, meme-based cryptocurrencies are often not real, worthwhile projects as their code is often copied and pasted. They are also less likely to have active developer communities, which are essential to keep them safe and up to date with the latest technology. Over the course of its existence, Dogecoin’s progress has almost stalled many times.
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