Buy an unreliable memecoin
It can be difficult to know if a memecoin is reliable, since they are based on well-known memes and animals. Some can be interesting as an investment, because they are based on Play-to-earn games, the metaverse and NFTs.
Thus, doing research is crucial to investing in the best coins. But the difficulty lies in the fact that most memecoins develop games, but only a handful go so far as to implement the promised products.
Buy memecoin without goals
Each memecoin must have a specific purpose, even if it is not really necessary for this type of cryptocurrency. The Shiba Inu (SHIB) was originally created to raise money to save stray dogs.
Not all projects have well-defined objectives. However, it is important to invest in memecoins whose developers have goals and a roadmap.
But there too, the objectives are not an absolute guarantee of reliability.
Not checking liquidity pools
When meme coins are listed, they are initially listed through DEXs Automated Market Makers (AMMs). The development team is creating a new liquidity pool for investors to purchase the tokens after launch.
These pools are governed by smart contracts. They make it possible to exchange cryptocurrencies between investors without having to resort to an intermediary. However, to achieve this, the development team must provide liquidity. Each investor then trades against this liquidity to obtain tokens which are issued.
The liquidity in question must be blocked in the protocol to prevent the developers from removing it at any time.
Fortunately, DEXs have implemented token locking mechanisms (liquidity lock) which protects investors. It is important to double check that the pool of the newly launched memecoin has been locked.
Be vigilant and consult your financial adviser before making any investment decision. Mirror-Mag cannot be held responsible in the event of bad investments. Before using any third-party service, you should do your own research.