This dynamic creates a moral dilemma. Darrien Justice, community manager for Garlicoin, another joker, says he would never advise anyone to buy a meme coin as an investment for exactly this reason – including those of his community. “The mainstream investors are definitely the exit liquidity, but they don’t quite get that,” he says. “I don’t want people to lose money buying Garlicoin. It sucks.”
Lane struggled with the same problem as CumRocket’s value skyrocketed. She cashed in enough of the profits from her own token holdings to allow her to quit her job and cover the costs of developing a use case, but she felt conflicted about the losses she could cause others to inflict. “I felt bad dumping. I didn’t want to be greedy,” she says. “If it’s your own card, it’s your baby. I wanted everyone to win.”
The tendency of meme coins to rapidly increase in value also creates fertile ground for scam tokens chasing FOMO. Simply by continuing the meme coin tradition – by cultivating a recklessness in investors that stems from a feeling that early buying into a coin will lead to wealth – even harmless projects create an overcast for carpet pulling and other scams.
Of the various meme coin investors who spoke to WIRED, most said they made an effort to assess the risk of fraud before purchasing a new token. But according to Dyma Budorin, founder of crypto audit firm Hacken, there is a limit to the due diligence one can do with the available public tools.
While the underlying code is generally not sophisticated (and therefore easy to check for security flaws or hidden mechanisms to scam buyers), little verified information is available about the distribution of meme tokens at launch. This means that developers could quietly award themselves a large batch of their own coin, which they could later sell in bulk, tanking the price – a textbook pump-and-dump.
“The lack of information poses a huge risk to any meme coin; you can be rough at any time,” says Budorin. “The code can be fantastic, with no hidden vulnerabilities, but because there’s no tokenomics audit, the token can be robust.”
For their part, the creators emphasize that meme coins play an indispensable role in attracting new faces to crypto. The accessible branding, Lane says, creates an entryway for people who might otherwise be alienated by crypto’s technical learning curve or ideological foundation. “Of course not everyone can win,” she says, “but that’s the nature of it.”
The people most deeply steeped in meme coin trading often share a belief that investors don’t need to be coddled, wrapped in cotton wool. Seth Zaraki, a longtime investor in meme coins, says the unashamed emphasis on profit over utility is part of what he appreciates most about meme coin culture. It’s a refreshing honesty and a level of effacement not found anywhere else in the industry, he says.
Zaraki says he couldn’t stop laughing when he and his wife bought their first meme coin in 2018.
“PEPE is clearly not designed for low-risk investors,” he says. “Virtually everyone who wants to put money into something like this knows what they’re doing is gambling. They simply do it because it makes them feel good.”
Ace, who himself was once “played” by a fraudulent project, takes a similar stance. “As a normal person, if you put more than $50 into a meme token, you’re stupid,” he says. “You’re just not cut out for this shit.”
