Doge, a Shiba Inu dog, is paired with bright typefaces 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, which led to a proliferation of dog-themed cryptocurrencies.
It's now possible to categorize dog-themed coins inside the meme coin subcategory. Dogecoin and its variants, Shiba Inu and Dogelon Mars are well-known to most retail investors, who observed a substantial amount of speculation on this new joke coin subcategory in 2021. Elon Musks's tweets regarding his interest in and support of Dogecoin last year were a major factor in the rise of these coins.
Pepe Cash, based on the Pepe the Frog figure, and "HODL" (hold on for dear life), from the crypto rallying cry to cling onto your coins at all costs, even during a market slump, are two more meme currencies outside of the dog-themed coin specialty.
Tips To Safely Invest In Meme Coins
Those acquainted with the crypto market know that a product's or platform's reputation is an important consideration when considering feasibility. Consequently, it is essential to learn about the project's main team members and their backgrounds. It may be hard to find out who the members of the development team are since they've decided to stay anonymous.
You should be aware of meme currencies when a single entity controls a large chunk of the whole supply. If a big token holder chooses to dump (sell out) their coins, the value of these digital assets is likely to plummet.
It should also be mentioned that those investors who want to get even more meme coins and invest their money in the mentioned digital assets are usually playing in online crypto casinos. The main reason behind this is that with the use of crypto casino gambling investors can earn even more meme coins. As a result the demand for these types of casinos increases. In order not to start gambling with scammers you should read the crypto casino review, where you can get more information about the way it works, its license, the games it offers and other important insights.
As many as 250 meme currencies are currently competing for the interest of crypto investors. At least a hundred of these have the word "inu" in their name. Many meme-inspired cryptocurrencies may seem authentic, but in reality, they are scams intended to take advantage of the rapidly rising meme coin craze. Rug pull scams may be avoided, which lowers the stakes for your endeavor.
A rug pull happens when the development teams abruptly dump all of their coins, causing the price to skyrocket. When the value of a coin plummets to zero, it's the investors that lose all they invested. Snow puppy and squid tokens are two recent instances of meme currencies that ended up in an alleged rug-pull. One or two investors or the whole development team might be dangerous when it comes to meme currencies. Because of this, verify that no one person or group has more than 5% of the token supply.
Automated market makers distribute meme currencies in most circumstances (AMM). New liquidity pools are created for investors to utilize when a coin is initially launched by the development team. Smart contracts known as liquidity pools enable investors to trade cryptocurrencies without the need for an order book or counterparty maintained by a third party. Liquidity pools, for example, allow investors to trade Ethereum (ETH) for a new Ethereum-based token. Liquidity must be provided by the development team to do this A liquidity pool is used to store both ETH and a portion of the meme currency.
To get their hands on the freshly issued currency, innovators would trade against this liquidity.
Liquidity may be withdrawn from the development team if proper safety measures are not in place. Investors are left with no way to exchange coins that are rapidly losing value when such situations occur. You should only join pools that have burn addresses (wallet addresses beginning with oxoooo) since this indicates that the liquidity has been frozen forever.
What Are The Risks Of Investing In Meme Coins?
Investments in Dogecoin and other meme currencies like it carry a degree of risk even though these projects seem to be lighthearted.
If the price per coin rises by thousands of percent within a matter of a few days, it signals to others that they may be able to profit from the meme currency's surge in value.
As a side note, it's worth mentioning that meme-based cryptocurrencies are often not real, meaningful projects as their code are frequently copied and pasted. They are also less likely to have active developer communities, which are essential for ensuring their safety and being on the cutting edge of technology. In the course of its existence, Dogecoin's progress has come close to a halt many times.