Most new memecoins end up worth close to nothing, and most of them get there without anyone pulling a rug. Nothing pays holders to stay, the earliest wallets bought for almost nothing, every sale in a thin pool pushes the price lower for the next seller, and attention moves on to a newer coin within days. The money that went in doesn't disappear: it goes to whoever sold first, and to the fees on every trade.
This page is a free chapter from our field guide, Before You Ape, lightly edited for the web. It is education, not financial advice, and it names no coins.
Who makes money
Every memecoin has a cast. Some are paid whatever happens to the price. Some are paid only if someone buys after them. Knowing who is who tells you whose exit you might be.
| Who | How they make money | When they sell | What it looks like on-chain |
|---|---|---|---|
| The creator | Buys at the bottom of the curve, often through extra wallets, and earns a creator fee on trading volume | Into the first real demand, or at the peak | Sells from the creator wallet or wallets it funded |
| Snipers | Bots that buy in the first block, then sell to the people who arrive seconds or minutes later | Within minutes | Buys in the same slot as the coin's creation |
| Bundlers | Buy a big slice of supply across many wallets at launch, so no single wallet looks large | All at once, or drip-fed | Many fresh wallets, funded from one source, buying in the same instant |
| Paid promoters | Paid in cash or tokens to post about a coin, then sell the tokens into the attention they create | Soon after posting | Wallets that received tokens before the posts, selling after |
| Volume bots | Paid to fake activity so a coin climbs trending lists | Constantly, buying and selling | The same trade sizes repeating, few unique wallets |
| Trading apps and bots | A percentage of every trade you make through them | Not exposed to price | Fee transfers inside your swap |
| Platforms | Launch fees, swap fees, paid boosts and listings on token screeners | Not exposed to price | Fee accounts, paid badges |
| Validators and MEV bots | Priority fees and tips, plus profits from trading around your order | Within the same block | Buys just before yours and sells just after |
| You | Only if someone later pays more than you did, after all fees | Ideally to a plan | Your wallet's history |
Look at who is missing from the natural winners: the person who finds a coin on a trending list, at the top, after a promotional post. That position is usually somebody else's exit. If a coin reached you through a big account, a trending list or a DM, assume everyone above you on that chain bought earlier and cheaper. Our guides to sniper bots, bundled launches and paid promotion show how to spot each of them.
Why being early isn't enough
You can't beat a bot that sees the coin before it's listed, or a creator who bought in the same transaction that created it. Being "early" as a person usually means being minutes behind the real early wallets. That's why it pays to spot their footprints rather than race them.
Why most coins go to zero
It isn't always a rug. Most coins die without anyone pulling anything, for ordinary reasons that stack up.
- No cash flow. Nothing pays holders to stay. The only reason to hold is the hope of a higher bid.
- Supply overhang. Early wallets hold tokens they got for almost nothing. Any rise gives them a reason to sell.
- Each seller lowers the price for the next. In a thin pool, a few sells can halve the price, which triggers more.
- Attention moves on. A newer coin with a fresher joke appears every minute, competing for the same money.
- Fees drain the pot. Every swap pays the pool, the app and the network. Busy coins leak value all the time.
- Nobody is obliged to buy. When buyers stop, there is no floor, and the chart drifts towards zero.
Where the money goes: a worked example
These numbers are made up to show the arithmetic. Over its short life, an imaginary coin attracts 400 SOL of buying from all wallets combined. When trading dries up, this is where that SOL ended up:
| Where it went | SOL |
|---|---|
| Taken out by the creator, snipers and bundled wallets | 190 |
| Taken out by other traders as they sold, some at a profit, many at a loss | 150 |
| Paid in fees to the launchpad, pool, apps and network | 14 |
| Left in the pool, shared by everyone still holding (if they could all sell at once, which they can't) | 46 |
| Total paid in | 400 |
Everything paid in is either taken out by a seller, paid away in fees, or left in the pool. There is no other source of money.
The maths of a fall
Falls are harder to recover from than they look. A coin that drops 50% needs to double to get back. One that drops 96% needs to rise 25 times.
| Fall from your entry | What's left of £100 | Rise needed to get back |
|---|---|---|
| 50% | £50 | 2 times |
| 75% | £25 | 4 times |
| 90% | £10 | 10 times |
| 96% | £4 | 25 times |
The default outcome for a new memecoin is zero. Checks are there to help you avoid the coins built to get there faster, and sizing is there so the ones that get there anyway don't hurt. You can check any coin free before you put money in, and see how our grades have turned out on the scorecard.