Stay away from meme coins. This is not advice; it's a warning.

If you get involved with meme coins, your chances of becoming "fresh meat" are far higher than stock traders in the A-shares market—over 99%.

Meme coins are cryptocurrencies inspired by internet memes or popular culture. Take Dogecoin, for example. It started as a joke but became famous, especially after endorsements by celebrities like Elon Musk. Today, meme coins are everywhere. Platforms like Pump.fun allow anyone to create their own meme coin with ease.

At its core, trading meme coins is a game of musical chairs—just like the tulip bubble from history. The only difference? It’s even easier to scam people now. You don’t even need tulip bulbs.

Why should you avoid meme coins? There are many reasons, but let’s focus on two:

1. The math guarantees most people will lose money.

2. Meme coins have a 98%+ death rate.

1. The Bonding Curve: You Lose from the Start

Meme coins, especially those created on platforms like Pump.fun, are presented as a "get rich quick" opportunity. In reality, they’re designed for you to lose money—mathematically.

At the heart of this is the Bonding Curve Model, a fancy-sounding mathematical formula that determines token prices. Dig a little deeper, and you’ll see it’s tailor-made to turn most buyers into losers.

The Bonding Curve uses this formula: x * y = k, where:

• x = token supply,

• y = market funds,

• k = a constant.

As the supply increases, the token price rises. When the supply decreases, the price falls.

In simple terms:

• Early buyers profit.

• Late buyers are stuck paying inflated prices.

• When you sell, the price likely plummets, leaving you in the red.

For example:

• A meme coin launches at $0.01. Early buyers snag 100,000 tokens.

• The price climbs to $0.10, and they sell for a 10x return.

• Then the hype dies down, and late buyers panic-sell. The price crashes to $0.02, wiping out latecomers.

The math is rigged to reward early players and punish everyone else.

2. Graduation Rates: 98% of Tokens Die

Pump.fun has a concept called "graduation": a token achieves a market cap of $69,000 and moves to a larger decentralized exchange like Raydium, gaining additional liquidity support.

Sounds promising? The data says otherwise. From January to October 2024, only 1.6% of tokens graduated. A staggering 98.4% failed.

Why is the graduation rate so low?

• Overcrowded market: With over 50,000 meme coins launching daily on Pump.fun, most fade into obscurity.

• Short-lived hype: Meme coins rely on community enthusiasm, which usually lasts just days or weeks. Once the buzz dies, the token becomes digital garbage.

• No real value: Most meme coins are just jokes with no technical backing or real-world use cases.

Even for the lucky few that graduate, the outlook isn’t great. Most see their prices collapse after migration because they can’t escape their dependence on short-term speculation.

3. Can You Cash Out? Good Luck

If a token doesn’t graduate, can you get your money back? Theoretically, yes. Practically, no.

• Rapid price drops: The Bonding Curve ensures that while buying is easy, selling triggers rapid price declines. Early buyers secure profits, while late buyers are forced to sell at a loss.

• Liquidity dries up: As hype fades, buyers disappear. Even if you want to sell, there might not be anyone to take your tokens. Your funds get trapped.

• Dead tokens: Failed meme coins lack teams or users, turning them into “digital graveyards” in your wallet.

4. It’s a Negative-Sum Game

The Bonding Curve creates the illusion of transparency. But underneath, it’s a negative-sum game:

• Early players profit off later buyers.

• Platforms take fees, eating into overall returns. Pump.fun has made $220 million in fees so far. If you’ve traded meme coins, some of that money came from you.

• Most investors lose.

No matter how hard you try, the math ensures that only a lucky few will profit, while the vast majority get burned.

5. The Truth About Influencers and Meme Coins

Social media influencers play a big role in hyping meme coins as “get rich quick” opportunities. But the reality? 65% of meme coins promoted by influencers go to zero.

A study by CoinWire examined over 1,500 meme coins promoted by 377 influencers with 10,000+ followers. The results were grim:

• 76% of influencers promoted "dead" coins (down 90%+ in value).

• 66% of tokens became worthless.

• 86% lost 90% of their value within three months of promotion.

• Only 1% achieved a 10x return.

Worse, the bigger the influencer, the worse the coin performed. Tokens promoted by influencers with over 200,000 followers lost an average of 39% in one week and 89% in three months.

Why do influencers push meme coins?

**Money.**Each promotion nets them $399 on average, plus 15,000 views. While they profit, their followers face massive losses.

Conclusion: Know the Game, Don’t Get Played

The world of meme coins glitters with wealth stories, but beneath the surface lie countless tales of failure and tears. From the cold math of Bonding Curves to ruthless competition and short-lived hype, meme coins are a high-risk gamble where most players lose.

Don’t be blinded by dreams of quick riches. In the game of musical chairs, the winners are the early players, the platform, and the influencers. Latecomers face losses—or worse, total wipeout. The math doesn’t lie: the number of winners is tiny.

If you must try meme coins, treat it like buying a lottery ticket. Stick to established tokens like Dogecoin, Shiba Inu, or PEPE. These have a longer history and a more resilient community.

But remember: meme coins are not investments—they’re entertainment. Imagine the money’s already gone when you buy. If it spikes, sell fast. Don’t get greedy. Greed is every meme coin trader’s biggest enemy.

Two Final Rules

1. Use spare cash: Only invest what you can afford to lose. Think “hotpot money” or the price of a missed Double 11 sale. Small bets mean better sleep.

2. Plan your exit: Meme coin markets lack staying power. Set a target—5x or 10x—and cash out. If it doesn’t hit, cut your losses. Don’t double down hoping to recover; you might not even get a chance to exit.

Meme coins are fun for a quick laugh and a front-row seat to the internet’s wild financial theater. But they’re like junk food: a treat, not a staple.

True wealth comes from long-term value and innovation. If you want to succeed in crypto, focus on projects with real use cases, long-term vision, and technical breakthroughs. Don’t bet blindly in the meme coin casino.

Making money is hard. Losing it is easy. Rationality beats luck. Value outlasts hype.

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