Your Guide to Not Getting Rekt in the Current Market: How to Avoid Rugpulls and Scams

The space has been buzzing lately, and you already know why.

The $TRUMP & $MELANIA launched on Solana, have stirred up the biggest memecoin frenzy we’ve seen in a while.

$TRUMP hit a $50B market cap and a $40B FDV in under 24 hours, bringing over 1M new users on-chain, with 475k wallets holding the token.

Love it or hate it, memecoins are winning right now.

@solana’s hitting ATH in price & liquidity is pouring in, this memecoin mania has also turned the space into a giant guessing game.

Is this really something that we’ve been waiting for, or are we just hopping on the next rug train?

Well, the crime szn is upon us.

Hard truth is, memecoins are bringing more people into Web3 than any tech innovation ever did.

Think about it, convincing someone to care about DeFi or decentralized governance is hard.

But slap a familiar face of your favorite celebrity or politician on a token, throw in some hype, and suddenly everyone’s aping in.

Well of course, there are these scam tokens everywhere but this time its different.

The POTUS himself has launched his own token now.

Silliness works. It grabs attention, creates buzz, and gets normies curious.

But at what cost?

The good is undeniable.

Memecoins generate buzz, onboard users, and make crypto a mainstream topic. But the bad, the scams, the FOMO, the financial losses, overshadows the progress.

Right now, the noise is deafening.

There are so many tokens, so much liquidity flying around, that even seasoned users are struggling to navigate the chaos.

And for normies? It’s a minefield.

But is it good for the space? That’s where things get complicated.

If there’s one chain that’s absolutely crushing it in the meme sector, it’s @solana.

The launch of $TRUMP and $MELANIA tokens pushed Solana into record-breaking territory, with the chain hitting all-time highs in network activity and price.

Here’s the rundown of what went down in just the past three days:

> DEX volumes shattered records, with $40B daily and $89B weekly volume.

> Revenue hit a new ATH at $56.5M daily.

> Stablecoin inflows exceeded $3.7B, bringing the total stablecoin market cap to $9B+.

> Phantom Wallet alone processed $1.25B in volume and 10M transactions yesterday.

Platforms like @JupiterExchange, @phantom, @moonshot, @MeteoraAG saw more active users than ever before.

Solana tokens across the board started pumping, liquidity flooded in, and the network’s activity hit levels no one anticipated.

More details in the newsletter.

This isn’t just hype, it’s market validation.

Solana is proving it’s not only built for scale but also perfectly suited for the fast-paced, high-volume world of memecoins.

Good time to start building on Solana, just saying :)

But this hype is a double-edged sword.

Memecoins are chaotic by nature - volatile, unregulated, and tend to attract both newbies looking for quick gains and opportunistic scammers lurking in the shadows.

Let’s talk about the $TRUMP token first.

Sure, it brought 1 million new users into the space, but behind the glitz and glam, the token is riddled with red flags.

> 80% of the supply is locked in a wallet tied to CIC Digital, a company with ties to one of Trump’s attorneys.

The token’s official website makes it clear: it’s “not meant to be an investment but a show of support” - a major warning that this isn’t a real project with longevity in mind.

Meanwhile, the top 10 wallets control a massive 89% of $TRUMP’s supply.

If that’s not a recipe for centralization, I don’t know what is.

While some users may get lucky and see some gains, the majority are likely to either get rekt or, worse, fall into a trap chasing that next 1000x that’ll never come.

What’s even scarier is that at the time of writing, both Melania and Trump tokens are starting to show signs of becoming slow rugs, prices are dipping, liquidity is dropping.

This is the unfortunate reality with memecoins, they have the potential to blow up, but more often than not, they burn out just as quickly.

$TIKTOK’s RugPull

And then there’s $TIKTOK, which could be a textbook case of how not to launch a token.

Ryan Fournier, Trump’s advisor, had endorsed the TIKTOK token ****through his X account.

What could go wrong?

Well, everything.

> $19M worth of tokens hit the market, only for Fournier to dump his bags, taking $850k with him.

The token’s price chart went from 90M volume and 70M market cap to zero in record time.

It’s a classic rug pull.

So, while these events might seem entertaining on the surface, the consequences are real.

With memecoins constantly in the spotlight, the risks are growing, and security issues are becoming a major concern.

We're seeing more rug pulls and scams than ever, and the liquidity in these markets is often controlled by a few individuals, which means the average trader is at a serious disadvantage.

$BARRON Scam

Few hours ago, a fake account pretending to be Barron Trump, the youngest son of Donald Trump, pulled off another textbook scam on Solana.

The account, which convincingly mimicked Barron's identity with 1.5 million followers, tweeted a simple "hi @solana" before announcing the launch of a new token, $BARRON, on Solana.

The account was suspended soon after.

Although, this move generated instant buzz.

Degens caught up in the hype and assuming the account was legitimate, aped into the token without a second thought.

It was all fake.

The token, with the contract address 4QAu6zzyUjdMokARe8yMH7ZpgtqQw3qQx4PECyR8pump, managed to attract significant liquidity in a short time.

However, as expected, the rugpull came swiftly.

We have some tips.

No need to say thanks.

1. Verify Team Transparency

Before diving into any project, always start with the team.

You can’t trust the project if you don’t know who’s behind it.

Investigate the background of the team members.

Look for reputable backers or partnerships that have credibility.

> Audit status is crucial, check if the project has been audited by reputable firms.

Ensure that they have established partnerships with credible organizations.

If you're the dev, make sure to do a KYC audit of your team.

2. Smart Contract Analysis

The smart contract is the heart of any Web3 project, and if it's not secure, your investment is at risk.

> Review the contract for any vulnerabilities or red flags.

Confirm that it’s been externally audited by respected auditing firms.

Investigate the ownership of the contract - can the team change the rules whenever they want?

> Liquidity locks are crucial, ensure they’re in place to prevent quick rug pulls.

If you're a dev, make sure to audit your token contract before deploying.

3. Tokenomics & Distribution

The tokenomics of a project often show if it’s designed for long-term success or a pump-and-dump.

> Analyze the token distribution percentages - where’s most of the supply going?

Check for any vesting schedules for the team or investors.

> Monitor developer wallet activity to ensure they’re not selling off tokens.

Verify that liquidity is locked, and for how long.

4. Community & Marketing

A strong community is usually a sign of a healthy project, but be careful, some communities are artificially inflated by bad actors.

> Observe the community on platforms like Discord, X, Telegram, real users will engage with genuine conversations.

Be wary of overhyped marketing and promises of huge returns.

Avoid projects that pressure you with limited-time offers or unrealistic guarantees.

5. Roadmap & Use Case

• Make sure the roadmap is achievable and detailed.

If the project doesn’t have a realistic roadmap, chances are it’s just a hype train waiting to derail.

Make sure the roadmap is achievable and detailed.

Look for a comprehensive whitepaper explaining the project’s goals.

Ensure the project has a clear use case—projects without one are just speculative.

6. Blockchain Activity

A project’s blockchain activity tells you a lot about its current state & potential future.

Use blockchain explorers to track token movements and activity.

Watch for large withdrawals or sudden wallet movements - these could signal a rug pull.

Be cautious if you see unusual token minting or burns happening behind the scenes.

7. Investment Approach

And finally, the most important part is how you approach your investments:

> Start small, never risk more than you’re willing to lose.

Avoid FOMO - there’s always another opportunity.

Don’t invest in projects without proper audits or clear security claims.

Watch out for disproportionate token allocations to insiders or the team.

Be cautious of high-pressure tactics and projects that launch on exchanges with no warning.

The Impact on the Space

These events speak to a larger trend in Web3, where speculation is driving much of the growth—and it’s happening fast.

The trouble is, not everyone can handle the volatility.

While some get in early and make a ton of money, new investors without a clear understanding of the risks are likely to get rekt.

The fact that Trump, Melania, and TikTok tokens are all experiencing what could very well be slow rug pulls just shows how dangerous the meme-coin market can be.

You might wanna look at the 2024 security report to get an idea.

Numbers never lie.

Differentiate between the noise & signal

Right now, Web3 is LOUD.

There are so many tokens, so much hype, and so many influencers shilling their bags that it’s hard to separate the legit projects from the pump-and-dumps.

Yes, memecoins are onboarding people faster than anything else.

But how many of those people will stick around after they lose money?

How many will walk away bitter, labeling the entire space a scam?

Final Thoughts

Look, it’s not bad to invest in memecoins.

They’re fun, and if you play it smart, they can be profitable.

But don’t ape blindly. DYOR as if your portfolio depends on it, because it does.

> Spot the red flags early

> Check for red flags

> Verify the project’s claims

> Don’t trust influencers blindly

> Know when to cash out

Memecoins might not be the most noble use of blockchain, but they’re undeniably effective at grabbing attention.

As a security firm, our advice is simple: Stay curious, stay cautious, and stay informed.

The world is moving on-chain, but make sure you’re not just moving with the herd.