It’s all fun and gains until your developer tweets: “oh fuck.”
Solana’s latest boom and its DEX developments have brought on a new wave of excitement to its decentralized applications.
At the forefront of the network’s DeFi resurgence are memecoins.
More than 19,000 new Solana tokens with some form of liquidity launched in the past week alone, according to trading data platform Birdeye.
The reason these tokens are so popular is they offer the slim chance to deliver life-changing gains for a relatively small outlay, leading some to dub the memecoin movement a “lottery” on Solana.
But unlike the traditional lottery concept, where hopefuls purchase cheap tickets in hopes of winning millions of dollars, memecoin investors can lose everything they own — and more.
Here are five risks you should consider before joining the Solana sweepstakes.
1. Memecoin creators are often totally inept
Memecoins are often set up by the very same people who invest in them — immature degens who don’t have a clue what they’re doing. A recent fat finger incident that burned investors is a perfect example of just that.
On March 18, the developer of memecoin Slerf burned $10 million worth of investors’ presale tokens instead of distributing them.
While it was a nightmare for presale investors, it quickly flipped into a win for Slerf, as media coverage helped spread awareness and centralized exchange listings stormed in.
Several exchanges, including HTX and Bitget, announced that trading fees earned from Slerf transactions on their platform would be used to help refund presale investors. It’s cold comfort to presale investors that Magazine has spoken with, though.
“I don’t feel satisfied even if my money comes back,” says one investor who spoke to Magazine on the condition of anonymity.
“You see, Slerf did a 10x on the presale, and I missed the opportunity,” he adds.
Slerf’s price performance following presale burn. (CoinGecko)
Slerf’s…
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