Meme Coins: Snake Oil for the 21st Century

“Pump.fun (commonly referred to as Pump) is a cryptocurrency trading platform for the Solana blockchain that enables users to create tokens and trade them immediately on the platform, as well as to launch them onto decentralized exchanges like Raydium.” — Wikipedia

Essentially, it’s a platform that allows an individual to take a meme (a popular image or topic), and then launch a crypto token of that meme for trade on peer-peer markets.

Ignore any wholesome fantasies you might have that you are “investing” in a cryptocurrency. You’re not. What you are actually engaging in by buying any meme coin, is the worst form of degenerate gambling imaginable.

And when I say the worst, I really do mean it. Worst by orders of magnitude so great you’d probably need to express it using some sort of differential equation.

I jest, but I’m sure you understand my point.

Buying meme coins is significantly worse, because unlike traditional gambling, they lack enforcement, regulation, and fairness.

Traditional gambling (like in a Vegas casino) has what is known as enforced RTP (return to player).

“Return to Player (RTP) is a term used in gambling and online games to refer to the percentage or prizes that will be returned to a player depending on funds deposited during the game initially. Return to Player is one of the ways to attract players.” — Wikipedia

On the other hand, meme coins are a land of price manipulation and scamming. If you were to go to the roulette table in a casino, you would be facing a predetermined set of odds. Yes you might lose some money, but you aren’t running the risk, that the croupier operating the table might grab all the chips, and make a run for it. Even if this were to happen, any loss to the player would be remedied by the casino, as well as the fleeing thief/croupier facing punishment from their employer, as well as law enforcement.

At the very least, with traditional gambling there is a pre-set agreement of the rules of play.

In the world of meme coin trading, this doesn’t exist. If you buy a meme coin, you never have any idea what is going to happen to your money. As with any purchase of crypto, in theory and in practice, your investment could increase or decrease in value. However, with meme coins, there is a very good chance that you could be buying something that is deliberately designed to steal all of your money. There is even a chance that the person that created the meme coin, could be a 12 year old kid, who has reserved most of the tokens for himself, and like most other meme coin creators, only intends to dump his allocated supply on unsuspecting buyers.

This is exactly what the son of Adam Biesk (a Californian art adviser) did on 19th November 2024.

Biesk’s son had released into the wild 1 billion units of a new crypto coin, which he named Gen Z Quant. Simultaneously, he spent about $350 to purchase 51 million tokens, about 5 percent of the total supply, for himself.

Then he started to livestream himself on Pump.Fun, the website he had used to launch the coin. As people tuned in to see what he was doing, they started to buy into Gen Z Quant, leading the price to pitch sharply upwards.

By 7:56 pm PT, a whirlwind eight minutes later, Biesk’s son’s tokens were worth almost $30,000 — and he cashed out. “No way. Holy fuck! Holy fuck!” he said, flipping two middle fingers to the webcam, with tongue sticking out of his mouth. “Holy fuck! Thanks for the twenty bandos.” After he dumped the tokens, the price of the coin plummeted, so large was his single trade.

Meme coin trading can be described as high risk speculation, but with an added minefield present, where its entire design is to only enrich insiders, scammers, and early adopters.

According to reports by Dune Analytics, the vast majority of people who trade on Pump.fun will lose all their money. And yet rather bizarrely, the meme coin industry is often regarded by its advocates as some sort of “generational wealth” opportunity. In reality, it’s a tool for the redistribution of wealth, from the poor, to the richer.

Meme coins are a mechanism that allow insiders and bad actors to harvest profit from unsuspecting, or particularly misled victims. The people who launch these coins (more often tokens), especially those willing to deceive their audiences, are the ones who benefit the most.

Many people have been bamboozled into believing this “redistribution of wealth” mantra. Unfortunately, what they fail to realise, is that this redistribution is actually occurring in the opposite direction. They often have this utopian vision, where rich people’s money gets filtered down to poor people. Many think “it’s great, I get something for free!”

Unfortunately, that is not what meme coin trading is. In reality, meme coin trading is when poor people get sold the cynical lie, “buy this crypto, it will make you untold amounts of money”, and then when they do, the creator of the cryptocurrency runs away with all their money, and everyone else’s.