Meme Season Scam Prevention Guide: How Doge Farms and Conspiracy Groups Use MemeCoins to Harvest Retail Investors?

As the popularity of some AI Memes in the Solana ecosystem has decreased, tokens like GNON (Numogram) and GOAT (Goatseus Maximus), which were trending a few days ago, have also shown a noticeable pullback in recent days. As shown in the figure below.

However, after Coinbase announced the launch of a new tool called Based Agent (which allows users to set up their own AI agents using a crypto wallet in three minutes) a few days ago, it seems that the wind for AI Memes has shifted to the Base ecosystem, with tokens like Luna (Luna by Virtuals) and VIRTUAL (Virtual Protocol) starting to perform strongly. As shown in the figure below.

The current feeling in the crypto circle is truly that it belongs to the Meme season, as most of the discussions among group members revolve around various MemeCoins. Additionally, Binance's direct listing of contract trading for GOAT and MOODENG has further boosted the attention on the AI Meme concept. As shown in the figure below.

Meanwhile, some institutions and celebrities have also started to participate in MemeCoins. For example, the token ai16z, which capitalizes on the a16z concept, has started to gain traction because a16z partner Marc posted two consecutive tweets related to ai16z, leading to a rapid increase in the token's price;

The emergence of the BAN token has directly ignited the art concept, as it is said that the DEV (which can be simply understood as the issuer) address of BAN belongs to Michael Bouhanna, the vice president of Sotheby's.

In summary, AI agent MemeCoins are hot, and art concept MemeCoins are also hot… Who knows what will explode next?

As one of the group members described: Meme coins have now become lightning in the sky, dancing wildly, dazzlingly bright, and real wealth is flying in the sky. They surge like lightning and drop like lightning. If you want to catch it, or become the one struck by lightning, it becomes difficult. As shown in the figure below.

Now many people are looking for MemeCoins in a relatively simple way, such as they tend to buy: those with interesting avatars, well-designed official websites, high follower counts on social platforms (Twitter), large trading volumes, many holders, or those directly recommended by group friends…

Conversely, some methods and concerns that investors are using to find MemeCoins are often well known by the issuers (market makers, conspiracy groups). Therefore, they may conduct some targeted reverse designs, such as specifically catering to retail investors' preferences to create corresponding fakes to deceive more people into participating in trading.

In previous articles on the topic of MemeCoins, we mainly organized some ideas and strategies from the perspective of investors. In this issue, we will change our perspective and make a hypothesis: How would a person go about scamming others by issuing a MemeCoin?

In fact, this process is somewhat like the relationship between a spear and a shield; depending on the position, the execution angle may differ. Those who are good at attacking always hope to find the most powerful spear in the world, while those who are good at defending hope to find the most powerful shield. However, the spear and shield are a relative process of mutual evolution, and there is no absolute question of who is the strongest.

Applied to the MemeCoin field, since investors will adopt different methods to choose targets, as issuers, they just need to do targeted design:

Typically, the basic information that investors focus on regarding MemeCoins generally includes Website, Twitter, and Telegram. As a MemeCoin issuer, the investment in the Website aspect is actually very low; many online tools can create various beautiful web pages without any programming background. As for Twitter, it is also not difficult; currently, on certain platforms, you can spend about $100–400 to buy targeted old accounts, which come with over 10,000 followers and may even be followed by some KOLs. As shown in the figure below.

In addition to the basic information about MemeCoins mentioned above, fabricating on-chain metrics is relatively more difficult, but it can also be achieved using trading bots (or directly using ChatGPT to build bots), such as:

1. Faking the number of holders

When a MemeCoin is issued, insiders may use sniper bots to prioritize purchasing a large supply (for example, on well-known platforms like Pumpfun, when the DEV address creates tokens, they simultaneously buy the tokens they created), and to make the transactions look normal, they often use multiple (dozens or even hundreds of) independent wallet addresses to conduct sniper trades.

Creating hundreds of wallets is actually quite simple; online tools like MCT and CoinTool can quickly accomplish this, as shown in the figure below. Then, using tools like Solnado (an anonymous transfer protocol on Solana) to privately transfer SOL tokens between bulk wallets can achieve the effect of deceiving Bubblemaps.

Basic countermeasures:

First, some trading aggregator platforms (like GMGN, etc.) will categorize and label holder wallets, which can serve as a preliminary reference.

Second, if you cannot directly query the correlation between wallets through tools like BubbleMaps, you can also use on-chain explorers or tools like Cielo to check the historical transaction records and holding currencies of wallets. If those large wallet addresses were created recently or have very few transaction records while holding only a single currency, then extra caution is warranted.

2. Faking transaction counts and volumes

Typically, transaction counts and volumes can also be faked using trading bots, such as setting up dozens (or more) wallets to conduct random buys and sells. A few days ago, I saw a group member share that they bought a Pixiu coin (which can only be bought and not sold) in the MemeCoin surge list of the OKX Web3 wallet.

Basic countermeasures:

You can try to identify wallet addresses with high transaction frequencies or total amounts but minimal profits; these are likely wallets used by insiders to inflate volume. For example, directly checking the PnL data of wallet addresses through aggregator trading platforms like GMGN, or using tools like Alphatrace to query Win Rate data. As shown in the figure below.

Of course, the above mainly lists several core on-chain data fakes. In addition, issues related to contract security, as mentioned in previous articles on the topic of MemeCoins, also require extra attention.

Additionally, do not be overly trusting of some ratings on platforms, as some ratings can also be improved by spending money. For example, DEX Screener provides paid channels to help project parties enhance their token trend score weight, with a cost of $3,999 for acceleration every 24 hours. As shown in the figure below.

In summary, in a game where the law is high and the magic is high, we need to continuously learn and think about improving our trading methods and strategies to have a greater chance of achieving our expected returns or at least not losing money or losing less money in this field.

This concludes our sharing for this issue. More articles can be viewed on the Huahua homepage. The above content is merely personal opinions and analyses, intended for learning records and exchanges, and does not constitute any investment advice.