Crypto,  Defi

A Guide to Buying Meme Coins Safely

Very recently I had a follower DM me and ask why he was having an issue with the displayed balance on one of the coins he’d recently bought. 

He had swapped some Solana for one of the recent hot meme coins, and his wallet showed the correct token balance, but when he went to swap it back to Solana… the dollar value didn’t make sense.

I don’t know what it should have been, but he sent me a screenshot and the balance was only 8 whole cents.

Since he wasn’t happy, it clearly should have been a lot more. 

I gave him a few pieces of advice, and he soon figured out that he had bought the wrong contract. 

He had bought a fake.

That gave me the inspiration to write this quick guide.

This isn’t going to be a post on picking out coins that are good investments (that’ll be another time).

This post is strictly for showing you how you can be confident that you aren’t buying a fake coin, rug pull, honey pot, etc.

This guide will be using the Solana ecosystem for all examples, but can easily be used for other chains like Ethereum. 

You just may need to find the equivalent tools for your desired chain if they aren’t supported by the tools mentioned below.

Before we get started… I am not a licensed financial adviser. This is not advice. I’m just some guy on twitter. This is simply the process I use to filter meme coins. Trade at your own risk.

Now that that’s out of the way, let’s get started.

Whether you find a coins cashtag on twitter, or you see it trending in Dex Screener, the first step is to find the coins twitter page.

If there’s no twitter page for the coin, I typically write it off right there.

Assuming you found the coin on Dex Screener, just copy the contract address that is labeled with the name of the coin. 

It will be between “Pair” and “Sol”.

Once you have it copied to your clipboard, paste it into the search bar on Twitter. 

You should get a search return of a number of tweets that have that contract address mentioned in them. 

Search through those until you find mention of an account that seems like it would be the official handle for the coin you’re looking for.

It may take you a few tries to find the right one, so don’t give up if the first account seems sketchy.

What you want to see is an active account, that is ideally followed by at least one of the accounts you follow. 

Unless you’re buying coins before they crack $100K market cap for the first time, you should see multiple people you follow already following, or at least talking about the coin and tagging that account (assuming you follow a decent amount of people on crypto twitter).

Most of the time the pinned tweet on the official account will also have the contract address in it. 

Copy that address, go back to Dex Screener and put it in the search bar. 

Cross reference the market cap, volume, and liquidity values with the coin you found originally and make sure they match.

If everything looks good, move on to the next step.

The risk of a meme coin rugging always exists, you can’t ever be 100% certain that it won’t. 

That said, you can do things to mitigate the risk.

The first thing you want to do is copy the contract address and paste it into RugCheck (rugcheck.xyz)

This will check a handful of metrics like top token holder percentages, contract renouncement, etc, and tell you if a coin seems like a blatant rug pull or not. 

The next step is to paste the contract into Birdeye (birdeye.so) and manually check the coin out. 

Under the “Safety” and “Security” tabs, you’ll want to check a few things.

You ideally want:

  • The contract to be renounced
  • The top holder percentages (excluding dex wallets) to be under 10%, the lower the better
  • The contract to NOT be mintable
  • Mutable info to say “NO”

If all of this checks out, you should be good to go. 

I’ve flipped coins before that didn’t meet the “mintable” or “mutable info” criteria I mentioned above, and things worked out just fine.

That said, if the contract has NOT been renounced, you’re playing Russian roulette. 

At any time, a shitty dev could change the contract so that the next time you interact with it, your wallet will be drained. 

Don’t trust contracts that haven’t been renounced, it’s not worth it.

For those who aren’t aware, a honeypot is a contract that allows you to buy, but doesn’t allow you to sell.

This lets the dev and his friends be the only sellers into all of the buying pressure, and then abandon the project.

Usually, you’ll be able to spot honeypots by the chart.

Oftentimes they just form a straight run up and to the right, because no one can sell so the devs can slowly sell their tokens without wrecking the chart.

Another way to tell is checking the transactions coming across in dex screener. 

If you only see a couple addresses doing all the selling, that’s a big red flag.

You can also check the contract address in the Dex Tools app. If the contract is old enough, Dex Tools will tell you if the project is a honeypot or not.

Hopefully this quick little guide gives you more confidence when buying coins on chain.

Even if you follow this guide, things can still go wrong.

This market is always changing, so make sure to stay up to date with current developments. 

The best way to do that is to hang out on crypto twitter so you can stay informed. 

People way smarter than me are on there every day giving extremely valuable advice. 

That’s pretty much all I have for this post. Stay safe, and happy shitcoining.

Until next time,

Fractal

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