Markets

Meme coin publishers pool funds before increasing liquidity

The popularity of meme coins has led to an increase in price gouging and other fraudulent activities. Publishers have been known to accumulate large amounts of coins before adding liquidity to the market, which can cause prices to skyrocket and leave unsuspecting investors with worthless coins.

Meme coins have gained popularity in recent years. People often make these coins as a joke or for fun, and they usually have little practical use. Despite this, meme coins have been a huge success, with many people investing in them hoping to make a quick profit.

However, the dark side of meme coins is not going away. Many of these coin publishers accumulated large amounts of money before adding liquidity to the market. This behavior can lead to price gouging and other bad outcomes.

Understanding the Memecoin craze

Launching meme coins with a bit of development behind them is one of the issues here. This means that they are vulnerable to price manipulation, as there is often no real value to their price support. Furthermore, releasing such coins in limited supplies can make them vulnerable to price gouging.

Tactic publishers use a large amount of coins before adding liquidity to the market. They do this by buying large amounts of the currency from early investors or by using bots to inflate the price. Once a publisher has a large number of coins, it can add liquidity to the market, which can cause the price to go up significantly. This price gouging can be devastating to unwitting investors. Many people need to understand the risks involved in investing in meme coins, as they can lose a fortune when the price crashes.

Meme coins often lack regulation by any governing body, which is another problem. This means that there is no oversight to prevent price gouging or other fraudulent activities. Additionally, since many meme coins are launched anonymously, it can be difficult to hold the publisher responsible for any wrongdoing.

In some cases, meme coin publishers have used their influence to pump up the price of the coin and then sell their holdings for a big profit. This can cause the price to crash, leaving investors with worthless coins. In extreme cases, meme coin publishers have engaged in exit scams, disappearing with investors’ money.

Live Case Examination

Some MEME coin publishers accumulated a lot of money before increasing liquidity. This means that there is a possibility of manipulation by a particular group. For example, a Twitter profile with the handle “x explorer He raised concerns about the behavior displayed by various groups.

Here, meme coins with similar behavior include WOJAK, TRAD, and NEET. Here are some examples:

Token Name: WOJAK Post Title: 0x8591F46A5E9B081289a3CFC4b5381F3c6e88389B

Screenshot of source publisher headline activities: etherscan

Another one is TRAD with post addresses: 0x4fE6ac27C8B992356D5fB8547b1dEb2540efA34E

Screenshot of publisher address activities Source: Etherscan
Screenshot of source publisher headline activities: etherscan

Finally, is the NEET Gallery similar activities.

Additionally, the frog-themed PEPE token saw a lucky buyer turn a $250 investment into a paper profit of over $1 million. It witnessed a massive boom in meme coins led by the newly launched PEPE. The resulting “meme coin craze” necessitated high trading volumes that are crippling the Ethereum network. Another fellow meme that has seen a rally is REKT, which is up 90% in one day.

These are just some of the instances where similar meme coins can lure investors trying to get instant profits. However, caution is in order. Most meme coins have little or no base value and trade entirely on popularity. Meme coins are issued in large quantities at market prices of less than a cent to make them look cheaper and attract potential buyers.

Serious risks

Low liquidity tokens and meme coins can pose problems for investors. These coins are often released with limited supplies and may need more trading activity on cryptocurrency exchanges. As a result, it can take time to buy or sell these coins at a fair price, which leads to sharp price fluctuations and other issues.

One problem with low liquidity tokens and meme coins is that they are prone to price manipulation. Because there is so little trading activity, it can be easy for a single investor or group of investors to manipulate the price of a currency. This can lead to huge losses for other investors who are unaware of what is going on.

In addition, selling low-liquidity tokens and meme coins can be difficult. If there are no buyers, investors may end up holding on to the currency for a long time, which can be very risky. In some cases, investors may be forced to sell the currency at a loss, which can destroy their portfolio.

Another area of ​​improvement is with the low liquidity tokens and meme coins related to the real value. Many of these coins are released as a joke or for fun and may have little practical use. This can make it difficult for investors to determine whether or not a coin is a good investment.

Finally, low-liquidity tokens and meme coins can be vulnerable to hacking and other cybersecurity risks. These coins need strong security measures to protect investors’ funds because they are often launched with little or no development. This can make it easier for hackers to steal coins and leave investors with huge losses.

Take precautions and DYOR

Users should do their due diligence before investing in any cryptocurrency to protect themselves from the risks associated with meme coins. This means researching the coin and its publisher to determine if they have a track record or are likely to engage in price gouging or other fraudulent activities.

In addition, it is essential to diversify your cryptocurrency portfolio. Investing in different coins can help reduce risks and protect you from losses if one coin experiences a decline in price.

Finally, it is essential to remember that investing in cryptocurrencies is inherently risky. While some meme coins may offer the potential for great returns, they also come with a high level of risk. As with any investment, it is essential to carefully consider the risks and rewards before investing your money.

Disclaimer

Following the Trust Project’s guidelines, this featured article features opinions and perspectives from industry or individual experts. BeInCrypto is dedicated to transparent reporting, but the opinions expressed in this article do not necessarily reflect those of BeInCrypto or its employees. Readers should verify information independently and consult with a professional before making decisions based on this content.

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