In a nuanced review posted on exit. The contributor, who is a key figure in the Dogecoin community, used his platform to outline potential pitfalls that unsuspecting investors could face.
The risks of Memecoins
@Mishaboar Express deep concerns over the current trend in crypto markets where meme coins are rapidly reaching market capitalizations of millions or even billions of dollars, facilitated by near-instant listings on major exchanges. He said: “There is an explosion of tokens reaching crazy market caps, with instant listings (within days) on major exchanges (sometimes despite warning signs). » This phenomenon, he argued, generally indicates significant support from venture capitalist (VC) and crypto exchanges themselves.
According to @Mishaboar, the quicklist of these tokens is often curated in advance through partnerships between token creators and crypto exchanges. “These large players usually hold a large portion of the tokens and can enter into agreements with exchanges before the tokens launch,” he explained. This arrangement allows them to take advantage of early trading surges, while increasing nominal liquidity on their platforms at minimal cost. Such practices raise questions about the transparency and fairness of the token launch and listing process.
He also highlighted the role of influencers in the market’s perception of these tokens. “Influencers tend to create a narrative around these tokens by claiming that they are ‘community-run,’ that they are your ‘frens,’ but that’s often really not the case,” noted @ Mishaboar. He argued that these narratives are designed to obscure the centralized and profit-driven nature of these token launches, thereby misleading the public. community on the true character and governance of these tokens.
Looking back on past controversies, @Mishaboar raised unresolved questions about BOME’s potential insider trading activities, particularly how platforms like Binance Quickly list new and risky tokens. “I have a question regarding Binance’s involvement in the launch of certain tokens. Specifically, does Binance have any pre-launch agreements with any of the artists or creators of these tokens? ” He asked. This question aims to find out if there is a deliberate strategy to manage risk for users or if the rapid referencing process inherently increases risk for them.
Expanding on the general risks associated with memecoins, @Mishaboar differentiated between different types of tokens. He pointed out that while some memecoins may have a community aspect, others are “100% venture-backed” and are typically the ones that see instant trading listings. “Not all tokens are the same,” he said, urging traders to recognize the high-risk nature of these investments.
Dogecoin Status and Future Outlook
Responding to a user’s concerns regarding Dogecoin’s plans and asset status, @Mishaboar reassured about the continued development and stability of Dogecoin’s network. “The Dogecoin network is working very well and version 1.14.7 was released a few months ago,” he confirmed. He highlighted the continued efforts of volunteer developers who have significantly reduced technical debt since 2021, improving the overall health of the network.
He added: “We will have new versions of Dogecoin Core (the reference implementation) and companies, organizations and independent developers are building things for that. As for companies (e.g. like X or You’re here) integrating it into their platforms, it really depends on those companies and the laws they have to comply with. Technically, there is nothing missing in Dogecoin that would prevent them from adopting it.
Concluding his detailed remarks, @Mishaboar reiterated the importance of vigilance and informed decision-making in the cryptocurrency market. He reminded his audience that despite the allure of quick profits, the volatile nature of memecoins means that trading them is akin to gambling, with risks varying widely across different tokens and market capitalizations.
At press time, Dogecoin was trading at $0.1615.
Featured image created with DALL·E, chart from TradingView.com
