Meet Larry the Croc, a young crocodile living in the northern beaches of Queensland with a love for internet culture and a bit of extra fish.

One evening, while lounging in his swamp and scrolling through CrocBook, he stumbled upon a new meme coin called “GatorGold.” It was everywhere—tweets from influential crocs, memes on CrocReddit, and promises of astronomical returns.

“Larry, you gotta get in on this. It’s the next Dogecoin!” said his friend Carl, who had already thrown his fish stash into GatorGold. Enthralled by the buzz and the fear of missing out, Larry invested a substantial chunk of his savings without a second thought.

Initially, things looked promising. The value of GatorGold surged, and Larry saw his investment double in a matter of days. He even started dreaming of buying his own luxury swamp. But soon, the hype started to fade. The developers went silent, the website became riddled with broken links, and the value plummeted. In the end, Larry was left with worthless tokens and a valuable lesson about the risks of meme coins.

4 must do steps to Investigate meme coins: Key Pointers (not an exhaustive list)

1. Liquidity (A vital metric to analyse)– going beyond the basics:

• Always check the coin’s liquidity. A high trading volume, ideally at least $100,000 daily, suggests a healthier coin with less risk of manipulation
• Use DEX tools to check the holder count of the coin, for example does the token have at least 3,000 unique holders? 
• Verify whether the top 50 token holders, excluding centralized exchanges, possess more than 60% of the tokens?
• Ensure the project has a minimum liquidity of $250,000 and has been on the market for at least a few months?
• Tools like dextools.io or dexscreener.com can help apply these filters.
• You will be surprised to find that only a few coins meet these criteria among the thousands listed on coin tracking sites.

2. Verify exchange listings and trading platforms:

• Ensure the coin is listed on reputable centralized exchanges and trading platforms. This can provide a layer of security and legitimacy. Some reputable centralized exchanges include Coinbase, Binance, Kraken (source: token metrics) across the world, whereas back home Swyftx is Australia’s top-rated cryptocurrency exchange.
• Use DEX tools to track the coin’s performance and any unusual trading patterns that might indicate manipulation.

3. How is the coin being marketed and sentiment in social media and community:

• Do you suspect a lot of fake followers? Does the X handle have 1000’s of followers with very little activity. Use tools such as Twitter analytics or Follower Audit to understand the sentiment and Active/Inactive/fake followers listed, if you see too many fake followers and a lot of them being created yesterday or the past few days then that’s a big red flag.
• Look for an active and engaged community. A coin with genuine backing will have active discussions and support from its users.
• Are the telegram groups just shouting BUY! BUY! BUY! and sharing a lot of memes with little to no responses to genuine questions? This again is not a good sign.

4. Other tools for Research/Investigation (In no particular order)

• DEXscreener can help in finding out coins which are a honeypot, that means you can buy that token but cannot sell them. Additionally, you can find out if an owner wants to appear hidden or if the token has an ability pause orders, these are all red flags.
• TokenSniffer generates a report and gives a score 0-100 based on a couple of audits including an ability to swap, how a smart contract has been setup, high sell fee or even if the contract owner can modify contract behaviour such as changing fees, disable selling etc.
• Standard block explorers such as Bubble maps or Nansen help you in finding out the wallets which are holding the biggest amount of a token to get a visualization of whether tokens are nicely distributed or very centralized. 

I am pretty sure there are more ways to Investigate Meme coins and these tools mentioned above can help catch possible scams and dodgy projects, but they aren’t perfect. Its upon you as an investor to be aware that not every scam can be caught by these tools.

PS -: Opinion mentioned here is for educational and informative purposes only and this shouldn’t be considered as financial advice.