While some memecoin advocates claim that these highly speculative cryptos are a type of 'culture coin,' this culture is flooded with fraud, as new research has confirmed a public secret, providing a more detailed view on the matter.
Cryptoasset monitoring tool developer Solidus Labs said it has found that approximately 99% of tokens on the pump.fun memecoin launchpad on the Solana (SOL) blockchain, and 93% of liquidity pools on the Raydium exchange have exhibited characteristics of pump-and-dump schemes or rug pulls. While the former refers to token price manipulation, the latter is marked by crypto project developers stealing their users' money.
"Unchecked, these fraudulent activities pose serious risks, not just financial loss to traders, but significant regulatory and reputational threats to crypto institutions facilitating memecoin trading," Solidus Labs said.
The researchers analyzed memecoins created on pump.fun between January 2024 and March 2025, and found that over 7 million tokens were deployed with at least five trades, but only 97,000 tokens maintained liquidity above $1,000.
Moreover, this market is also known for its infamous so-called bonding curve pricing model. It means that memecoin prices rally exponentially with each additional purchase of the token, which benefits early buyers and disadvantages late entrants.
"Creators stand to profit directly from each incremental purchase, while traders who join later invariably face inflated token prices and heightened risk of severe losses when creators liquidate their holdings," the authors of the report explained, adding that this is only one of the methods being used by token creators to profit unfairly.
Meanwhile, after examining 388,000 liquidity pools on the Raydium exchange, Solidus Labs found that around 93% of them demonstrated characteristics of a 'soft rug pull,' when liquidity is withdrawn abruptly, hitting prices and memecoin investors.
While the largest rug pull reached $1.9 million, median losses amounted to $2,832, the research found.
"Such transactions demonstrate the widespread exploitation of market participants, with hundreds of traders routinely victimized by each rug pull event," the report concluded.
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