The Memecoin Casino

Summary

Planet Money: The Meme Coin Casino – A Comprehensive Summary

Introduction

In the February 28, 2025 episode of NPR’s Planet Money titled "The Meme Coin Casino", hosts Alexi Horowitz Ghazi and Nick Nevis delve into the wild and often chaotic world of meme coins. This detailed exploration uncovers how meme coins have evolved from internet jokes into a speculative frenzy, illustrating the intersection of technology, culture, and economics in the digital age.

The Viral Livestream: GenZQuant

The episode opens with Nick Nevis recounting a viral livestream from November 19, 2024, featuring an anonymous 13-year-old who launched a meme coin named GenZQuant. The young creator bought 5% of his coin’s supply and streamed his activities online. Within moments, the coin’s price skyrocketed as viewers bought in spontaneously. However, the teen quickly sold his holdings for approximately $20,000, causing the coin’s value to plummet. This incident exemplifies the nascent yet volatile nature of meme coins, highlighting how easily individuals can manipulate digital currencies without regulatory oversight.

Notable Quote:

“Holy fuck. Holy fuck.” – Teen Creator [01:42]

Historical Context: From Bitcoin to Dogecoin

To understand the current meme coin landscape, the hosts trace the origins back to Bitcoin’s inception in 2009, which was envisioned as a decentralized alternative to traditional currencies. However, the cryptocurrency space soon became plagued by speculative and fraudulent activities, leading to the creation of Dogecoin in 2013 by Jackson Palmer. Initially a parody, Dogecoin garnered significant community support and even charitable endeavors, but it couldn’t escape the rampant pump and dump schemes that marred the early crypto environment.

Notable Quote:

“The irony is definitely, definitely not lost on me.” – Jackson Palmer [09:38]

Technological and Cultural Shifts

The narrative progresses to highlight two major revolutions that shaped the meme coin phenomenon:

1. Cultural Revolution: The merging of internet meme culture with cryptocurrency, exemplified by Dogecoin’s success and subsequent use in various online communities.
2. Technological Leap: The advent of Ethereum in 2015, which simplified the creation of new tokens by allowing multiple cryptocurrencies to exist on a single blockchain. This technological advancement drastically lowered the barrier to entry, enabling the proliferation of thousands of new meme coins.

Notable Quote:

“Blockchain is like the solution to all the world's problems.” – Zeke Fox [11:39]

The Rise of Pump Fun

A pivotal technological advancement discussed is Pump Fun, a trading platform launched in January 2024 by three young entrepreneurs in London. Pump Fun revolutionized meme coin creation by making it a point-and-click process, eliminating the need for deep technical knowledge. This platform enabled users to launch and promote their own meme coins with ease, fostering an environment ripe for speculative investment and internet-driven hype.

Notable Quote:

“It's like, how is this even funny? And sometimes the fact that they're not funny is what's funny.” – Zeke Fox [19:16]

The Mechanics of Meme Coin Creation and Promotion

Pump Fun introduced streamlined features such as:

• Livestream Promotion: Allowing creators to broadcast and market their coins in real-time.
• Leaderboards: Displaying newly created coins, fostering competition and urgency among creators to gain visibility.

However, the ease of creation led to an influx of low-quality and often absurd meme coins, with many failing to attract sufficient interest or sustaining their value.

Notable Quote:

“Pump Fun is a bit shadowy, but as far as we can tell, it was created in January of 2024.” – Nick Nevis [17:32]

Key Opinion Leaders and Influencers

The success of a meme coin often hinges on endorsements from influential figures:

• C-List Celebrities: Personalities like Iggy Azalea and Caitlyn Jenner launched their own coins, albeit with limited success.
• Crypto Insiders and Influencers: Key Opinion Leaders (KOLs) on platforms like Discord, TikTok, and YouTube can drive substantial interest and investment in meme coins through their endorsements.

Elon Musk emerges as a pivotal figure whose tweets have historically propelled coins like Dogecoin to significant heights, creating a speculative cycle where his influence fuels ongoing market movements.

Notable Quote:

“Elon Musk is like the meme coin market mover in chief.” – Nick Nevis [25:28]

The Reality: Few Winners, Many Losers

Despite the allure of quick profits, the reality is stark:

• Low Success Rate: Data from Dune Analytics reveals that only about 3% of traders on Pump Fun have made over $1,000, indicating that the vast majority lose money.
• Zero-Sum Game: Meme coin trading operates on a principle where gains by a few directly result in losses for many, akin to a casino setup where the house (Pump Fun) profita consistently through transaction fees.

The episode underscores the psychological factors at play, such as Fear of Missing Out (FOMO), which drive continuous investment despite the high likelihood of financial loss.

Notable Quote:

“What everyone wants is that next one that's going to go up 10x100x1000x.” – Zeke Fox [27:41]

Conclusion: Meme Coins as a Modern Casino

Planet Money wraps up by portraying the meme coin ecosystem as a contemporary casino, where the majority of participants are unlikely to come out ahead. The platform Pump Fun benefits the most, collecting hefty fees from trades, while a small fraction of creators and early investors reap substantial rewards. The episode poignantly questions the sustainability and ethical implications of such a system, emphasizing the need for greater awareness and possibly regulation to protect everyday investors from speculative pitfalls.

Anticipated Topics: The hosts tease an upcoming episode focusing on the journey of an anonymous street rodent transformed into an internet celebrity and a multi-billion-dollar cryptocurrency asset, further illustrating the unpredictable and often absurd nature of meme coin success stories.

Key Takeaways

• Meme coins represent a fusion of internet culture and speculative finance, driven by technological advancements like Ethereum and platforms like Pump Fun.
• Influencers and key opinion leaders play a crucial role in the visibility and success of these coins, often driving speculative bubbles.
• The economic reality is that meme coin trading is a high-risk endeavor with a low probability of significant returns for the majority of participants.
• The meme coin market mirrors a casino-like environment, where the structure benefits the platform and a select few, rather than the general investing public.

Notable Quotes with Attributions and Timestamps

• “Holy fuck. Holy fuck.” – Teen Creator [01:42]
• “The irony is definitely, definitely not lost on me.” – Jackson Palmer [09:38]
• “Blockchain is like the solution to all the world's problems.” – Zeke Fox [11:39]
• “It's like, how is this even funny? And sometimes the fact that they're not funny is what's funny.” – Zeke Fox [19:16]
• “Elon Musk is like the meme coin market mover in chief.” – Nick Nevis [25:28]
• “What everyone wants is that next one that's going to go up 10x100x1000x.” – Zeke Fox [27:41]

Final Thoughts

"The Meme Coin Casino" episode of Planet Money provides a thorough and engaging examination of the volatile world of meme coins. By intertwining anecdotes, expert insights, and historical context, Alexi Horowitz Ghazi and Nick Nevis illuminate the complexities and dangers inherent in this modern financial phenomenon. Whether you're a crypto enthusiast or a casual observer, this episode offers valuable perspectives on why meme coins continue to captivate and challenge the economic landscape.

Transcript

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[Nick Nevis]

This episode includes a kid cursing.

[Alexi Horowitz Ghazi]

This is Planet Money from npr.

[Nick Nevis]

A few months ago, I came across this livestream video clip that had started going viral online that I think captures something essential about the absurdity of the current financial moment we're living through. Here's the backstory. On the night of November 19, 2024, this baby faced kid, he looks around 13 years old, used a new online platform to launch a brand new cryptocurrency into the world. We're not using his name because he did all this anonymously. The cryptocurrency he created is what's known as a meme coin, which is a kind of joke currency. Something that doesn't hold any inherent value besides what other people on the Internet are willing to pay for it. The kid named his coin Gen Z Quant. He spent a few hundred dollars to buy up about 5% of the total supply of his new coin, and then he also started livestreaming on the platform. Somebody else recorded the livestream, which is why in the video you can hear the kid and a couple other voices.

[Unknown Speaker]

Are we bonded yet or what's good?

[Nick Nevis]

In the video, you can both see the kid's face and a chart showing the coin's price. Within seconds, the list of people buying the coin starts to stream in and the little green price line on the chart starts shooting upward like a rocket ship trying to reach escape velocity on its way to the moon. At first the kid seems surprised. Wait, what?

[Unknown Speaker]

He said, wait.

[Nick Nevis]

What? I'm so confused. But then he gets this kind of devious grin on his face. His cheeks start to get a little flushed. He. He moves his cursor over to a sell button on the website and with one click he cashes out the entirety of his holdings in GenZquant, some 51 million tokens for a cool $20,000 or so. There's a murmur of surprise from other people watching the livestream in the chat, a little burst of fire emojis starts popping off and the price of Gen Zquant then immediately collapses. The green line on the price chart turns red and takes a nosedive. And for a moment, the kid again seems shocked at what he's been able to do. Holy fuck. Holy fuck. And then the kid makes it clear he is not in Fact. So confused, he seems to know exactly what's happening. He extends both of his middle fingers to the camera and utters a line that's become kind of infamous in the crypto world. Thanks for the 20 bandos. Thanks for the 20 bandos. Thanks, in other words, for the $20,000 or so that this group of total strangers on the Internet had just transferred right into his account. The kid then stands up, starts tugging at his hair, and just takes a moment to revel in what he's pulled off. Yo, yo, yo, yo, yo. What the fuck? And I think maybe the most absurd part of all this is that the kid then goes on to pull this exact same move to two more times with two other meme coins he created that very same evening, netting over $50,000 in total. No, no, no, no, no, no, no, no, no, bro. And when you take a step back and just think about what's happening here, it's kind of wild, right? We're living at a time where a 13 year old can create his own cryptocurrency, successfully hawk it to a bunch of strangers on the Internet over livestream video, and then rip them off for tens of thousands of dollars, not once, not all from the comfort of his own home, and all before bedtime. If someone pulled this move on a market like the New York Stock Exchange, they might have had government regulators knocking on the door. But meme coins are kind of a wild west. And the thing is, what this one kid did is just a tiny glimpse into this much bigger economic story. Just one example of a transformation rippling across the Internet. There are thousands of these meme coins being launched every single day now involving everyone from literal children to social media. Sensational like Hoktua or Mu Dang the Pygmy Hippo to the President of the United States. It's the kind of thing that makes you wonder, how in the world did we get here? Hello and welcome to Planet Money. I'm Alexi Horowitz Ghazi, and I'm joined by freelance reporter Nick Nevis.

[Alexi Horowitz Ghazi]

Hello, Alexi.

[Nick Nevis]

Hello.

[Alexi Horowitz Ghazi]

Yes. Over the past few months, you and I have been on a deep dive into the world of meme coins.

[Nick Nevis]

We've been spelunking in the crypto mines.

[Alexi Horowitz Ghazi]

We've been getting lost in them. Because over the past decade, meme coins have gone from a one off joke to a speculative frenzy worth tens of billions of dollars.

[Nick Nevis]

Today on the show, the story of the Meme Coin Casino. How a few technological leaps and cultural shifts helped turn a seedy Internet backwater into a giant cryptocurrency gold R.

[Alexi Horowitz Ghazi]

This.

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[Nick Nevis]

To tell the story of how we got to this moment where we are constantly awash in new meme coins, we have to begin at the beginning. And in the beginning, of course, there was bitcoin.

[Alexi Horowitz Ghazi]

Bitcoin was launched in 2009 and it was pitched as a sort of utopian alternative to government backed currencies. It was a way for people to pay each other without having to rely on the existing financial system.

[Nick Nevis]

But in the years after its launch, there was also this whole wave of often sketchy new bitcoin copycats. And this is where you start to see this pattern develop that's characterized the world of cryptocurrency ever since. A cycle of grand utopian promises followed by a period of frenzied speculation and outright fraud.

[Alexi Horowitz Ghazi]

And this was the seedy state of crypto that inspired what is widely considered to be the first meme coin dogecoin.

[Nick Nevis]

The story starts back in 2013 with a guy named Jackson Palmer. Palmer was an Australian product manager at a tech company, and he believed that there was something fundamentally useful about what crypto promised to do. But when he looked around at some of these speculative new cryptocurrencies, he saw that people seemed to be using crypto as a kind of cash grab. Basically, some people were running what are known as pump and dump schemes.

[Alexi Horowitz Ghazi]

Here's how it would work. Some programmers would create a new coin, they'd hype it up as the next bitcoin, maybe do some sketchy stuff to fake demand and get people to buy in, all to pump up the price. And when enough money had flowed in. They would sell off all their coins, they would dump their holdings, the price would collapse, leaving everyone who'd bought in holding the bag.

[Nick Nevis]

As Palmer looked around, he thought crypto was turning into kind of a joke. So Palmer why not turn it into an actual joke? He described how he came up with the idea in an interview with our daily podcast, the indicator. Back in 2018, I'd come home for.

[Unknown Speaker]

The day in an Australian kind of tradition, you know, cracked open a beer, and I was just sitting around. And the way it kind of came together was that I had one browser tab open with this article about Doge, and right next to I had CoinMarketCap, which is a very popular website for checking the valuations of cryptocurrencies. So my tab names kind of almost spelled it out for me in a way. And I just thought, dogecoin, that, that's hilarious.

[Nick Nevis]

Doge, you may remember, was this super popular Internet meme built around the image of a dog, a quizzical looking shiba inu. And it was paired with these kind of grammatically challenged captions like such, wow. And much amaze.

[Alexi Horowitz Ghazi]

Palmer and a friend coded up a new coin, and in doing so, they married the world of memes with the world of crypto.

[Nick Nevis]

For Palmer, dogecoin was an attempt at convincing the crypto curious to make more rational investment decision. But instead, the good people of the Internet decided to pull a giant irreverent yes. And to Palmer's joke coin, they started buying more and more of them. Palmer was surprised, and at first, he went along for the ride. He and a community of fellow crypto jokesters donated their increasingly valuable dogecoins to charity. And for a while, things were going well.

[Unknown Speaker]

But whenever you have something that's going really successful, you have a successful community like that, and there's a monetary element to it. It's like blood in the water, right? Like sharks can, like smell it from miles away.

[Alexi Horowitz Ghazi]

And pretty quickly, fraudsters started to use dogecoin in the kind of pump and dumps it was meant to critique, which was exactly the opposite of what Palmer had intended.

[Unknown Speaker]

Yeah, tell me about it.

[Nick Nevis]

Right?

[Unknown Speaker]

The, the, the irony is definitely, definitely not lost on me. You know, I feel guilty enough for creating dogecoin, which I'm sure that, that people have at some, you know, I know that people have lost money on in the past and that, and that pains me.

[Nick Nevis]

In the years that followed its creation, Dogecoin ended up spawning dozens of copycat cryptocurrencies, or copy doges, I guess. In this case. But the number of these new meme coins was still limited by the technical expertise someone needed to make one. You needed to be able to essentially copy and tweak Bitcoin's underlying code.

[Alexi Horowitz Ghazi]

And to understand how that barrier to entry started to change, we called up Zeke Fox. Zeke is an investigative journalist at Bloomberg and author of the book Number Go Inside Crypto's Wild Rise and Staggering Fall.

[Nick Nevis]

What do you do when you're not digging into the smarmy back corners of the crypto world?

[Zeke Fox]

I've got three little kids, so I like to hang out with them and I hope they never get into meme coins.

[Nick Nevis]

Yes, keep them, keep them quarantined. Zeke says that first revolution that helped spawn our meme coin filled moment was a cultural one. The one where Dogecoin helped marry the world of memes to the world of crypto. But the second revolution was a technological leap. It came a few years later with the invention of a brand new blockchain called Ethereum.

[Alexi Horowitz Ghazi]

So a blockchain is basically a ledger that everyone can see, and it keeps track of how many tokens someone has of a given cryptocurrency. It used to be that in order to make a new cryptocurrency, you had to code up a new blockchain. So bitcoin had its own blockchain, Dogecoin had a different one, but Ethereum made it so that you could keep track of multiple cryptocurrencies on the same blockchain. You could just create a new coin right on top of Ethereum's underlying infrastructure.

[Nick Nevis]

And this new Ethereum blockchain helped set off a massive surge in new cryptocurrencies starting around 2017 or so. They were called initial coin offerings, or ICOs. And these coins were often framed as useful new technologies, cryptocurrencies that would have some sort of real world utility.

[Zeke Fox]

This was the time when people were still really pitching blockchain as, like the solution to all the world's problems. So in general, these ICOs were like, it's the blockchain for dentists, or this is going to be the blockchain that helps track agriculture.

[Nick Nevis]

It's bitcoin for farmers.

[Zeke Fox]

Yeah, but people are basically trading them just on hype. And studies afterwards found that something like 3/4 of all the ICO's initial coin offerings were scams or fraud.

[Nick Nevis]

You can see that same quintessential pattern playing out again here. An era of utopian promises turning into a whirlwind of fraudful deceit.

[Alexi Horowitz Ghazi]

Yet Zeke says this round of crypto speculation was also limited in its impact because the majority of investors just did not understand the basics of transacting on the blockchain, like how to set up your own crypto wallet or trade coins.

[Nick Nevis]

But then came the third revolution. That helps explain how we got to our current meme coin moment. And this one had both a cultural element and a technological one. The cultural part happened around the time of the COVID 19 lockdowns, when a bunch of bored day traders stuck at home started banding together to buy meme stocks. Companies like AMC and GameStop. This was the marriage of meme culture and the entire stock market.

[Alexi Horowitz Ghazi]

The technological part was the rise of mainstream crypto exchanges like FTX and Coinbase. These platforms made it easier for retail investors to buy and sell cryptocurrencies, and that helped swell the market to new heights.

[Zeke Fox]

During that huge crypto bubble of like 2021 22, there certainly was some meme coin trading, but it was not the focus of cryptocurrency traders.

[Alexi Horowitz Ghazi]

The rise of the meme coin was still to come. Most crypto bros were still focused on mainstream cryptocurrencies like Bitcoin and ether. And the most radical speculators were obsessing over things like non fungible tokens or NFTs. Like those weirdly expensive bored ape cartoons.

[Nick Nevis]

People were buying apes together.

[Alexi Horowitz Ghazi]

Strong planet of the speculative ape investments.

[Nick Nevis]

Exactly. But as we have learned in the cyclical history of crypto, number that go up must eventually come down. Which is exactly what happened in November of 2022. That's when it was revealed that the founder of crypto exchange ftx, Sam Bankman Fried, had been secretly using billions of dollars of customer funds. Massive risky bets.

[Zeke Fox]

In winter 2022, FTX collapses. And that's like the nadir of the crypto market.

[Nick Nevis]

Crypto winter, some might call it.

[Zeke Fox]

Yeah.

[Nick Nevis]

So how do we go from crypto's dark night of the soul to an era teeming with more meme coins than we can keep track of? And who are the winners and losers of this brazen new world? That's coming up after the break.

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[Nick Nevis]

At this point we've seen the same pattern play out over and over in the world of crypto. There's a rush of utopian promises, followed by a speculative rush of shady investments, followed by a sobering collapse as all this sketchy stuff is revealed.

[Alexi Horowitz Ghazi]

Dogecoin, you'll remember, was first invented as a cheeky response to the wave of sketchy bitcoin copycats. And you can think of the current Meme Coin moment as a sort of like doubling down on the joke when.

[Nick Nevis]

Crypto exchange FTX collapsed, bringing down the whole crypto market along with it. It was like the ultimate Emperor's New Clothes moment. Even Sam Bankman Fried, the person who seemed to be the face of crypto going legit, turned out to have committed fraud to the tune of billions of dollars. In light of that, some crypto traders stopped believing in any promise of the technology's underlying value. They started to see it as pure irreverent speculation.

[Alexi Horowitz Ghazi]

And early last year, that sort of nihilistic feeling fused with yet another technological leap forward, Zeke Fox says, this time in the form of a new website.

[Zeke Fox]

The latest meme coin craze was really enabled by this new trading platform called Pump Fun that made creating a Meme Coin a point and click experience. And more than 5 million coins have been created in like, the year that it's existed.

[Nick Nevis]

Pump Fun is a bit shadowy, but as far as we can tell, it was created in January of 2024 by three entrepreneurs in their early twenties in London. We reached out to Pump Fun, but they didn't get back to us.

[Alexi Horowitz Ghazi]

And the idea behind the platform was basically to demolish the barrier to entry for people making new meme Coins to create a place where people could launch and then promote their own coins as a sort of social media experience.

[Nick Nevis]

Let's go to Pump Fun. Will you give us a little safari?

[Zeke Fox]

Yes, definitely.

[Alexi Horowitz Ghazi]

Zeke took us on a little tour of the Pump Fun website. It looks a bit like a throwback to the flash websites of the 90s. All bright neon text and jpegs of memes.

[Zeke Fox]

I know. It's like. Seems like something that only a child could enjoy.

[Nick Nevis]

Maybe a man child.

[Zeke Fox]

I think there's a lot of kids.

[Nick Nevis]

On there, some who've made a lot of money.

[Alexi Horowitz Ghazi]

Dump Fun has made it so incredibly easy to make new meme coins that the homepage is just constantly updating with images of coins that have just been born, coin after coin after coin.

[Zeke Fox]

I'm looking at their most recent coins and, you know, there's. What if we all hold. 27 seconds ago dogenoid 46 seconds ago liter of hats 1 hour ago what's.

[Nick Nevis]

The kind of meme coin leaderboard today?

[Zeke Fox]

Like, some of these ones just sort of become, like, classics, and they keep trading like, dogecoin is still top dog. I'm sorry.

[Nick Nevis]

Top Doge.

[Alexi Horowitz Ghazi]

That was completely inevitable.

[Zeke Fox]

Shiba Inu, which is like a dogecoin ripoff, is very high up there. Pepe Dog with hat has proven to have some staying power, but I think Fartcoin is the hottest meme coin right now.

[Nick Nevis]

Fartcoin's going to the moon.

[Zeke Fox]

Yeah. I mean, fart coin, to me, it's like, how is this even funny? And so I was asking my favorite meme coin trader source about this. I was like, do you think it's funny? And he said, sometimes the fact that they're not funny is what's funny.

[Nick Nevis]

It's like horseshoe meme theory.

[Zeke Fox]

Yeah.

[Nick Nevis]

Pump Fun is a place where the newest juvenile inside jokes of the Internet can be transformed almost instantaneously into tradable financial instruments. And so you can see the stream of new coins on the site as the cutting edge of what wannabe meme coin millionaires think might go viral.

[Alexi Horowitz Ghazi]

Irreverent Internet culture meets the market.

[Nick Nevis]

Could anything possibly be more Planet Money than that?

[Zeke Fox]

Should we make a coin and find out?

[Nick Nevis]

Let's go right to the edge of making a coin and then hover on the edge.

[Zeke Fox]

What do you think? Should it be a cute animal?

[Nick Nevis]

Yeah. I mean, our mascot is the squirrel from the T Shirt project.

[Zeke Fox]

Oh, where can I get this squirrel? Do you want to. I brought a picture of my cat, but we can use the squirrel.

[Nick Nevis]

Yeah, just type into Google type in Planet Money Squirrel.

[Zeke Fox]

Uh, it's got a martini.

[Nick Nevis]

It's a squirrel with a martini glass.

[Zeke Fox]

Wow. This seems like it has a lot of meme coin potential.

[Nick Nevis]

Definitely.

[Zeke Fox]

So what should we call it?

[Nick Nevis]

Well, there's either Animal Spirits or there's PM Squirrel Coin.

[Zeke Fox]

PM Squirrel Coin. Okay, so the ticker will be pmsc, naturally, for the description. This is the Planet Money Squirrel. Does that sound good?

[Nick Nevis]

Oh God, we're playing with fire. We could launch a coin that just gets out of our hands.

[Zeke Fox]

Just so you know, you can never take it back.

[Nick Nevis]

We did not in fact launch the Planet Money Squirrel coin. Not today, Satan. But it was a shockingly easy prospect. By filling out a few description details and uploading a copy and pasted image from the Internet, you too can be the proud, terrified parent of a new meme coin. But raising that coin to a monstrously profitable adulthood is not so easy.

[Alexi Horowitz Ghazi]

Because you can think of Pump Fun as this hyper literal attention economy. If a coin creator can't generate enough excitement around their meme coin, they won't be able to ensnare enough buyers to get it to take off.

[Zeke Fox]

It's very easy to create the coin, but what's hard is attracting attention for it.

[Nick Nevis]

Now, there are three basic ways people garner attention in this world, and it comes down to how much clout the person might have for the first group. For the people who are cloutless in Cryptoland, Pump Fun offered a solution. It had a livestream feature so a no name new coin creator could try to build a following by basically carnival barking the merits of their meme coin in real time.

[Zeke Fox]

So Pump Fun had like a built in feature where the creators of the tokens could live stream themselves to promote their coins. And this went downhill fast. People were doing like really gross things to try to get attention. There was someone claiming that they had kidnapped the developer of the coin and would torture them. Oh God, somebody killed a chicken.

[Nick Nevis]

Dark.

[Zeke Fox]

Somebody held a gun to a fish. A kid had his mom flash the livestream one. That was a little sillier. This kid created a coin he was livestreaming while he was streaming. He took the money and then gave the camera double middle fingers and said thanks for the 20 bandos in a high pitched voice.

[Alexi Horowitz Ghazi]

That of course is the precocious and a little devious 13 year old from the beginning of our story.

[Nick Nevis]

Thanks for the 20 bandos. Pump fun eventually took down the livestream function from its website in response to all of this mayhem. Sort of a classic case of this is why we can't have nice things.

[Alexi Horowitz Ghazi]

So that's the first group, the people without much clout who have to find some way to grab attention for their meme coin. Now there's a second group of meme coin creators and their big strategy is to already be famous.

[Zeke Fox]

And we've mostly seen kind of like C Listers do this. Iggy Azalea launched a coin on Pump Fun. And that one, for a long time I was seeing people, I guess maybe mostly Iggy Azalea herself tweeting about her mother coin. Caitlyn Jenner had one.

[Nick Nevis]

There was the ill fated Hoktua coin, which crashed just hours after it launched. And perhaps the most famous or infamous of all the new meme coins was the one launched by President Donald J. Trump.

[Alexi Horowitz Ghazi]

But the third and final group of meme coin creators are the real power players. These are the shadowy groups of well resourced insiders who know how to play the game.

[Nick Nevis]

Because there's this whole ecosystem of crypto influencers on places like discord X, TikTok, YouTube. And if these influencers start talking about.

[Zeke Fox]

A coin, their followers will start to buy, because these people have a track record of talking about coins kind of early on and the coins going on to attract even more attention.

[Nick Nevis]

This meme is so fire, it's going.

[Zeke Fox]

To burn the Internet down.

[Nick Nevis]

Guys.

[Unknown Speaker]

I think this meme coin could pull some crazy numbers.

[Nick Nevis]

And now today, this coin is already about to hit 800k market cap and break through.

[Zeke Fox]

And in crypto, these influential people are called KOLs, which stands for key opinion leader. And those people are often paid to promote the coins. And some people will tell their followers, I'm getting paid to promote this coin and other people will not.

[Nick Nevis]

Zeke says there is one key leader whose opinion seems to be valued above all others in the world of meme coins. A man who has taken the joke so far as to helm a controversial new government entity named after that original Doge meme.

[Zeke Fox]

What is really ideal is if Elon Musk will talk about whatever the coin is about.

[Alexi Horowitz Ghazi]

Like, one of the big reasons dogecoin is still the most valuable meme coin is because Elon Musk started tweeting about it in 2019.

[Zeke Fox]

But it's not just dogecoin. A lot of the most successful coins have had some connection to Elon Musk.

[Nick Nevis]

Elon Musk is like the meme coin market mover in chief.

[Zeke Fox]

Yes, because the people who are trading these are watching patterns and they're saying, hey, last time Elon Musk talked about something, the coin went up, so maybe it'll happen this time and then that kind of becomes a self fulfilling prophecy.

[Nick Nevis]

Now, regardless of which kind of meme coin creator we're talking about, the goal on Pump Fun is generally the same. Whether you are a 13 year old boy or a C list celebrity or a crypto insider, what you want is for your meme coin to to blast off. You can think of the site as a kind of massive launchpad, like a giant Cape Canaveral, but a lot of it is filled with the skeletal remains of Meme coins that have failed to launch.

[Zeke Fox]

Something like 99% of coins are dead.

[Nick Nevis]

On arrival, which means they basically have zero buyers, right?

[Zeke Fox]

Like I bet you a lot of them never sell a single token.

[Nick Nevis]

But if a coin creator can get enough key opinion leaders on board, they might get some initial price liftoff. Because this whole hoard of key opinion followers might hop on the rocket in hopes that they can hop off before the price collapses.

[Alexi Horowitz Ghazi]

And if they can get enough price liftoff, their coins will graduate from Pump Fun to bigger platforms with whole new groups of potential buyers, like one platform aptly named Moonshot, to the biggest exchanges like Binance and Coinbase.

[Nick Nevis]

The hope for the truest Meme coin believers is that their coin will somehow manage to breach escape velocity and make it all the way to the financial moon, maybe even Mars, to join the Doges and Pepe coins of yore.

[Alexi Horowitz Ghazi]

But regardless of whether a coin dies on the launch pad or makes it to the moon, there's one group that makes money no matter what. Because Pump Fun gets a 1% cut of every trade made on the platform.

[Zeke Fox]

Right? And Pump Fund, this platform, in just a year or so, Dune analytics, which is a blockchain analysis company, says that it's made $400 million in fees.

[Nick Nevis]

So just like as in a casino on Pump Fund, the house also always wins. Yeah, but if you are somehow coming away from all of this with the impression that Meme coin millionaires are being minted all the time, Zeke says that is exactly the fear of missing out that fuels this whole market.

[Zeke Fox]

What everyone wants is that next one that's going to go up 10x100x1000x. And they're the stories of people who really have made a million bucks because they bought Dog Whiff hat early. And when somebody hears that, it's pretty powerful, creates this sense of fomo. But Dune analytics studied blockchain data and found that only 3% of traders on Pump Fun ever made $1,000.

[Nick Nevis]

And keep in mind, Meme coin trading is a zero sum game. It every dollar someone makes on a meme coin mathematically has to come at the expense of someone else buying it. Which means that this tiny minority of winners, that 3% of traders, is making their fortunes off the vast majority of meme coin investors.

[Alexi Horowitz Ghazi]

Which raises the enormous question, why do so many people continue to invest in a system that feels so clearly rigged against them? Why do people still invest in meme coins?

[Nick Nevis]

In your mind, is this. Is this all just a giant casino? Like, is this just like an ancient practice of sometimes irrational gambling? Like, just updated and put onto the blockchain?

[Zeke Fox]

I mean, I definitely would say this is just gambling. Everyone involved would agree with that, I think. But it's a really weird form of gambling. And oftentimes, by the time that you or I hear about any coin, you know, the insiders have probably accumulated a big supply at a low price, and they're just waiting for losers like us to hear about it and buy some so that they can sell theirs and get real money.

[Nick Nevis]

In a way, a lot of what's going on here feels like a new twist on the classic pump and dump scheme.

[Alexi Horowitz Ghazi]

But instead of people promising financial gains based on some underlying value, these days, many meme coin boosters are just promising that there will be enough other chumps out there to cash you out when the time comes.

[Nick Nevis]

Call it a chump and dump.

[Zeke Fox]

Now, I think that most of the people who buy this like they're not being fooled by the coins. They just think that, hey, I am not the last person who's going to buy this coin. Someone else will come along later and buy this coin for more.

[Nick Nevis]

Has anyone made a Greater fool coin?

[Zeke Fox]

I guarantee that they have.

[Nick Nevis]

And in fact, when we checked the Pump Fun registry, there turned out to be no less than 12 competing greater fool meme coins, half of them with the ticker sign fool. If you want to hear what it's like to have your whole life taken over by the meme coin casino, we have another episode coming out next week. It's the outrageous tale of how an anonymous street rodent became an Internet celebrity, got turned into a political martyr, and eventually was transmuted into a piece of cryptocurrency worth billions of dollars. This episode was produced by Willa Rubin. It was edited by Jess Jiang with help from Keith Romer. Fact checked by Sierra Juarez and engineered by Neal Rauch. Alex Goldmark is our executive producer. I'm Alexi Horowitz Ghazi.

[Alexi Horowitz Ghazi]

I'm Nick Neves. This is npr. Thanks for listening.

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