How memecoins actually work

Strip away the hype and a memecoin is just a few simple smart-contract mechanics. Understand them and you'll spot scams faster than 99% of buyers.

1. Supply

A memecoin's total supply is fixed at deployment. $SKI has 1,000,000,000 tokens. Multiply price × supply for the market cap — the only number that matters when comparing coins.

2. Liquidity & DEXs

When you "buy a memecoin" you're swapping ETH for tokens in a liquidity pool on a decentralised exchange (DEX) like Uniswap or Aerodrome. Larger pools = lower slippage. Pools should be burned or locked so the team can't rug.

3. Tax

Some contracts charge a fee on every buy/sell (e.g. 5% to a treasury). $SKI has 0% tax — what you swap is what you get.

4. Renounced contracts

When a team renounces ownership, no one can mint new tokens, change the tax, or pause trading. Renounced + burned LP = the two strongest safety signals.

5. Rug-pulls and CTOs

A rug-pull is when the deployer pulls liquidity. A CTO (community takeover) happens when the original dev abandons the token but holders rebuild it organically — that's exactly what powered $SKI.

Ready?

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