Day 5 - A Guide to Trading Memecoins on Solana
A Quick Intro to Solana & Memecoins
Solana is known for its fast transaction speeds and low fees.
The Solana network is bustling with new projects, many of which are memecoins.
Memecoins often start as internet jokes but can gain significant value quickly.
They are highly volatile and speculative.
The memecoin market on Solana is active but filled with potential pitfalls.
Memecoins can be highly manipulated, leading to quick losses.
Their value can fluctuate wildly making due diligence essential.
How to Trade Memecoins
Buy Solana (SOL) - Purchase SOL through a cryptocurrency exchange or a wallet that supports it.
Transfer Solana to Phantom - Send your SOL to a Phantom wallet, a secure option for Solana assets.
Set Up Bullx/Photon - Use Bullx or Photon, either on their websites or through Telegram.
Sending Solana to Bullx/Photon - Transfer SOL from Phantom to Bullx or Photon (your web3 exchange)
Identify Trading Opportunities - Use Pump Fun, and Dex Screener to scan for trending coins.
Conduct Due Diligence - Copy the coin’s contract address (CA) and run it through Rug Check website.
Examine - Check the project’s social media, developer wallet, and bubble map for red flags.
Purchase Memecoins - Paste the CA into Bullx or Photon and complete the purchase, ensuring all details are correct.
Wallet Tracking - Use Cielo to track wallets and consider copy trading for an edge.
Risks & Considerations
High Developer Allocation - Avoid coins where developers hold a large percentage, as this suggests a higher risk of a rug pull.
Lack of Social Media Presence - Coins without active social media profiles are often less trustworthy.
Suspicious Bubble Maps - Be wary of bubble maps showing a high concentration of connected wallets, indicating possible manipulation.
Mutable Contract Data - Ensure the contract data is immutable to prevent unauthorised changes that could harm investors such as liquidity removal among others.
Copycat Memes - Avoid coins that simply copy existing memes, as these are often low-effort scams, the community activity and commitment is important.
Fake Safeguarding Bots - Be cautious of Telegram groups with bots that drain wallets.