Meme coins have taken the crypto world by storm. Who doesn’t know Doge and Shiba Inu! These lighthearted tokens, often inspired by internet jokes and pop culture, have become a multi-billion dollar phenomenon. While some investors have struck it rich, meme coins are known for their wild swings and high risks.
Andre Cronje, a big name in the blockchain world, has a proposal to change that. He’s co-founder of the Fantom blockchain and wants to see meme coins issued in a safer way.
https://x.com/AndreCronjeTech/status/1777566484614590935
The Wild West of Meme Coins
Imagine a coin based on your favorite meme. Sounds fun, right? But here’s the catch: meme coins often lack real-world use cases and are easy to manipulate. Here are some of the risks Cronje highlights:
“Rug pull“: The team behind the coin creates a big buzz, then sells all their tokens for a profit, leaving investors holding worthless coins.
Wahle dumps: Early investors with a large chunk of coins can crash the price by selling them all at once.
Disappearing liquidity: Liquidity refers to how easily a coin can be bought and sold. If the developers remove the liquidity pool (where coins are traded), the coin becomes practically untradeable.
Shady code: Some meme coins give developers too much control over the code, allowing them to change the rules or even steal funds.
Cronje’s Plan for Safer Meme Coins
So, how can meme coins be fun without the fear factor? Cronje suggests a system with more checks and balances, involving the Fantom Foundation, a non-profit that supports the Fantom blockchain. Here’s the gist:
Team funds locked away: Up to 5% of the tokens can be used for the meme coin team’s expenses, but this money will be locked away and require approval from multiple parties, including the Fantom Foundation, to access.
Most tokens go to liquidity: A whopping 85% of the coins will be placed in a liquidity pool, making it harder for anyone to manipulate the price. The Fantom Foundation will also be involved in overseeing this pool.
Marketing funds secured: Up to 10% of the tokens can be used for marketing, but again, these funds won’t be readily available. They’ll be locked away with multiple sign-offs required.
Rewarding growth: Once the coin reaches a certain level of trading activity, the initial investment from the Fantom Foundation will be returned, but the rest of the liquidity pool will be permanently locked, further stabilizing the coin.
A New Era for Meme Coins?
Cronje’s plan isn’t the first attempt to make meme coins safer. Other blockchain networks are also exploring ways to support these quirky tokens while protecting investors. This shift suggests a growing recognition that meme coins aren’t just a passing fad. They have a dedicated following and the potential for real growth. By offering more security and stability, these initiatives could usher in a new era for meme coins, one where fun and profits can go hand in hand.
Is this the end of risky meme coins?
Not necessarily. Cronje’s proposal applies to meme coins issued on the Fantom network. It remains to be seen if other networks will follow suit. Additionally, even with safeguards, meme coins can still be volatile investments.
The takeaway? Meme coins can be a fun way to dabble in crypto, but always do your research before investing. Look for projects with a clear plan and a team committed to transparency. Remember, even the most hilarious meme can turn into a sad investment story.
