A complete guide to help you stay as a safe as possible in Web3
Finding memecoins early can lead to generational wealth, but how do you make sure you’re not putting your valuable money into scams? This is the challenge many users in Web3 have to deal with. With this guide we want to help you to better assess a token utilizing various tools available in the market.
If you were early on memecoins like BODEN, BONK or WIF, you could’ve made a nice profit on your trades. However, it’s not always that easy. Because for every successful memecoin, there are probably dozens that fall flat.
But how do you find these gems that bring you so much joy? Let’s start at the beginning.
Step 1: Find tokens at launch
Getting in early with memecoins is a huge risk, but it’s still the focus of this guide. You may step into an existing memecoin with a more solid reputation, like PEPE or DOGE. However, if you want to be as early in their lifecycle as possible, you need DappRadar’s Hot Contracts. Make sure you’re a PRO member, and then sort the contracts on your chain of choice by “deployment”. This will give you the newest contracts on a chain.
1 – Be logged in as a PRO member, and then go to Hot Contracts
2 – On the top left you can use a dropdown menu to select to blockchain you want to explore. We support Ethereum, Polygon, BNB Chain, Blast, Base, zkSync Era and more will come.
3 – You can also click on the Filters, and filter by smart contract types and the timefame in which then contracts were deployed.
You can switch between these filters to find newly deployed smart contracts with specific functions. We could for example select the “tokens” and a “24h” timeframe.
In the screenshot below, you can see that there’s a new unverified token on Ethereum, which already attracted 32 UAW. That’s the contract we will use in our research today.
What about Solana?
DappRadar allows you to discover new smart contracts across various chains. However, not on Solana.
To find newly deployed tokens on Solana, you will need to use other third-party tools. For example, Fluxbeam has its own Telegram bot that notifies you when a new liquidity pool is launched. In addition you could use Birdseye to spot low market cap tokens on Solana, or various other chains.
Let’s assume you found a contract through DappRadar’s Hot Contracts. What’s next?
Step 2: Check for scams with DEXscreener
Now it’s time to start checking for possible rugpulls or other scam behavior. This will require you to utilize various tools that dive into smart contracts. These tools can help you catch possible scams and dodgy projects, but they aren’t flawless. Be aware that not every scam can be caught by these types of free tools.
We start with DEXscreener.
To detect scams, you will need the smart contracts of the memecoins you’ve found. Copy the contract you discovered through Hot Contracts, and then go to DEXscreener. DEXscreener can help you spot various security issues. For example, in the screenshot below you can see that this token is a “honeypot”, which means you can buy the token, but you can’t sell it. In addition, there appears to be a hidden owner, while there’s also modifiable tax and the ability to pause transfers. These should all be big red flags.
However, not every “issue” on DEXscreener also means that you can’t trust a project. Take the PEPE memecoin for example. The token also has 1 issue, according to DEXscreener. PEPE has a blacklist of wallets that apparently aren’t allowed to trade the token. Highly likely this will not be an issue for the average user, but it’s important to assess how heavy some of these issues weigh.
Once you’ve checked the token through DEXscreener, let’s also take a look at another tool.
Step 3: Double check for scams with TokenSniffer
Let’s copy the smart contract found through DappRadar’s Hot Contracts once again. Now we will go to TokenSniffer, and paste the contract address into the search bar.
This service will generate a report based on a couple of audits. This includes for example the ability to swap, how the contract has been set up, the token holders and the liquidity provided. The example we used previously, gets a 0/100 score. This means we need to stay away from it. Reasons for this score include an extremely high sell fee, and the ability for the contract owner to modify contract behavior, like disable selling, changing fees or mint more tokens.
Do we look at reputable memecoins like PEPE, then we see it has a 70/100 score on TokenSniffer. Again, this shows that even more established projects don’t have a perfect score. Therefore it’s important to read the analysis from TokenSniffer and make your own judgment. Also keep in mind that even memecoins with a high score can turn out to be scams.
Step 4: Social media research
If your check on TokenSniffer and DEXscreener doesn’t raise any serious red flags, you may want to dive deeper into the community. Therefore it’s time to do some research on social media. Most of the projects in Web3 have an account on X, but having such an account doesn’t guarantee anything. Yet still, we’re going to look around and see if we can find anything. Here are some things you can look for:
- Search for the contract address on X, and see if the project, bots or users have been sharing it already. What do they say?
- Can you find the project’s official X account, for example by typing the ticker ($MONKEY) into the search bar on X.
- If you find a project account on X, make sure to check who’s following. Or those bots, or real people? Is anybody from your own network following, and do you trust that person enough?
For example, in this case I couldn’t find anything about the smart contract on X. The ticker $MONKEY mainly refers to a new memecoin on Solana. Now, this is another red flag, because our contract was on Ethereum. Therefore it’s highly likely the scammer wanted to copy the Solana memecoin and cause confusion.
Step 5: Who’s invested?
In the previous step I already mentioned that it’s good to look at your social circle on X. Are they following the projects you’re interested in? The same goes with projects when you put your money in it. Who’s investing in these memecoins, and do you trust these people?
You can use the standard Block Explorers to find the wallets which are holding the biggest amounts of tokens. This works, but is a bit more complex. Through something like Bubble Maps you can also get a visualization, which allows you to see whether tokens are nicely distributed or very centralized.
Nansen has a paid service that allows you to see ‘smart money’. This would allow you to follow the investments of respected and successful traders. However, it’s also possible that you become exit liquidity for those types of wallets, so be careful.
In a similar vein, Debank allows you to follow whales and their activity. You could follow a set of wallets and keep an eye on their investments. Debank can leave notifications for you, based on the activity of the wallets you follow. You can do the same with DappRadar’s portfolio tool, but you can’t receive any notifications at this moment. You will need to manually keep an eye on the contents of these wallets.
Advice: Do not throw your money away
Even if you find a memecoin that’s absolutely not a scam according to DEXscreener and TokenSniffer. And perhaps the best crypto investors in the world have a bag of tokens, then still this doesn’t guarantee success. Therefore, one should never invest more than they are willing to lose. The bigger the opportunity, the higher the risk involved. Be aware of this.
Closing words
Never just jump into a memecoin or token because it’s promoted on X, TikTok or Instagram. We advise everybody to do more research, and we hope this guide will help you with that. Moreover, this guide now allows you to create your own discoveries and find memecoins early instead of following somebody else’s tips. If you’re interested, you can join DappRadar on Discord, and discuss things with our team and the wider community. Keep exploring!
