Memecoins season: the onchain perspective

Hello anon,

Memecoins have been pumping last few days and several people made a killing running portfolios from hundreds of dollars to millions

Below some onchain considerations on the Memecoins season

EXTRA: if you're a brand looking to acquire attention in the Web3 / Crypto investing space, feel free to email us at [email protected]

🐸$PEPE - WHAT HAPPENED ONCHAIN

Main runner, as you already know, was $PEPE

Coin went to from $30k to $150m market cap in a couple of days, and lot of wallets quickly multiplied their capital with massive gains

Even smart money wallets (a mix of whales and institutional investors tagged by Nansen) accumulated $PEPE significantly: net inflows of ~$1.2m in the last week and ~$160k in the last 24h

Also, smart money balance has been up only, with no significant dumps since launch

Biggest dumps so far has been connected to the following wallets:

• On april 26th, wallet 0xaed7b37660102e8aff82d72bf27c322d38650d02 dumped $538k worth of Pepe on Huobi

• On April 26th, wallet 0x5ebad50becdc87159d3104f7dccd26eea27b70ad dumped $426k worth of Pepe on Huobi

• On April 26th, wallet 0xb8ed182a3b4483bcc2be5867ce15b900a05234d8 dumped $419k worth of Pepe on Huobi

• On April 23rd, wallet 0xbe1d4bb8a72f08d5ff8e1da5201671beef162c4997bc51cf7e7b4e5838a4c6ee dumped $390k worth of Pepe on Huobi

As a note, those transactions moved the market significantly: current market depth on Huobi for a -2% move is $40k. A $400k sell on Huobi (like the above) should have caused -20% market dump

The wallets which profited the most from $PEPE trades were the ones flagged by Lookonchain.

The addresses below profited $1.25m from $PEPE trading:

• 0xAd106e36FB4e94387F85342D9D9C31aaF5Ce293b

• 0x98075137a8eec7AD1A94c825c0F68ce25bBF1019

• 0x7607709F3771502bb1fbe3AFf84323369144EaCF

• 0x19848274B125f4f75c6D0524F5196473c023d21a

They all seem connected together as shown in the chart below

👤💰HOW TO ASSESS IF A NEWLY LAUNCHED MEMECOIN WILL LIKELY BE A RUG

There are several platforms / actions which can help you detect a scam

1/ Honeypot detector

The most useful is the Honeypot detector: it scans the smart contract and notifies you if the project will likely be an honeypot (i.e., you can buy but cannot sell)

2/ Check the funding of the deployer wallet

The first thing to examine pre-launch is the deployer. Ideally, funding should come from a CEX (like Binance, Coinbase, etc.). The deployer should be ‘clean’ - the only transactions should be getting eth from exchange, creating the contract, and the other contract functions they execute.

This is because scammers do not want to be linked to KYC’d profiles on CEX

For example, if you look at a random memecoin BabyPepe ($BPEPE), you can find the contract creator wallet here

If you click on it, you can see the source is Kucoin, and this is good: this is not sufficient to exclude a rug tho

3/ Check if the contract is verified

You can see next to the contract section if the contact is verified (there is the green check). In the case of BabyPepe ($BPEPE), it is. Nice.

4/ Check if the liquidity is locked

Important to have the LPs liquidity locked, otherwise you might be at risk that it is removed and you would not be able to complete transactions for the token (and sell your holdings)

In order to check that, you can look on Etherscan if the related LP coin has a release time (contract will tell you the epoch time when it will be unlocked, can convert it in a date via https://www.epochconverter.com/ )

But the easiest method is simply go on https://www.dextools.io/, search your coin and see if this lock is green: in this case $BPEPE liquidity is locked

5/ Check if the token has Website, Twitter, Medium etc.

However, many rugs will still have a website, Telegram, Twitter, and/or Medium: However, social media / web presence helps reducing rug risk

6/ Check on Dexscreener if the token has both buys and sells

You can search your coin on free website Dexscreener, and look at the list of buys and sells of the coin. If there are buys only, that is suspect: this might be an honeypot (i.e., people who buy, cannot sell)

7/ Check token holders: the more granular they are, the less likely some whale will dump massively

If the holders are very concentrated, a dump of top holders may cause massive decline in price and confidence loss of the smaller holders. Would choose coins where top holders are in the 1%-4% range

8/ Check buy and sell fees

Check if the contract has buy and sell fees: i.e., when you buy / sell, part of your funds will be sent to deployer

Obviously, if the fee is too high (more than 10% of the transaction amount) I would avoid buying the token

You can check fees here

BabyPepe ($BPEPE), for example, has 5% buy and sell fee: acceptable

Disclaimer: the methods above can reduce the probability of buying a rug / honeypot, but even if you check everything there is always a chance of being rugged: be safe frens :)