Don’t Buy Floki Inu (Or Any Other Meme Tokens) If You Are One of These 5 Types Of People
The dangers of DeFi for the uninitiated.
Note: This is not financial advice to buy or sell any asset, digital or otherwise. Please do your own due diligence before trading or investing in any digital or non-digital assets.
A couple of days ago, a friend who lives in Canada suddenly shared with me the latest meme token.
“How many Floki Inu do you have?”
It was the first time I’d ever heard of this new meme token. My friend directed me to a story being covered on Business Insider, where apparently, a new token inspired by Elon Musk’s dog Floki, was doing an aggressive ad push in the city of London.
I quickly pulled up the chart on my go-to website for tracking cryptocurrencies, CoinGecko.com.
Just look at how much much this spoof (Floki Inu Token) of a spoof (Shiba Inu Token) of a spoof (Dogecoin) has gone up in 2 months. Plus, with the massive spike in price overnight on 27 Oct 2021, this was indeed a huge red flag to me.
Coupled with the huge outdoor ads with viral marketing capitalizing on trends – targeting the retail investor who is still figuring how to even buy Bitcoin – I had a feeling this was going to be a disaster in the making for the average retail investor.
I took a quick look at the Floki Inu Token Twitter account. Looking through some of the comments, I realized that many people any people have no business even buying Floki Inu Token. I’ve summarized a few of the major red flags that I’ve come across. (All identifiers such as photos and Twitter handles have been erased to protect the identity of those mentioned.)
If you have the same questions, please do more research before you even consider putting any money into these meme tokens. You could end up losing all your money for very basic reasons, and losing money is not a very fun experience.
1. You Have No Idea Where to Buy Them.
Perhaps a genuine question, “how do I buy?” or “where can I buy it?” is perhaps a naïve and even innocent one. But if you even need to ask this, you’ve obviously not considered using a tool called a search engine.
Unless you live in China and you cannot use Google, a simple search will tell you where you can buy Floki Inu Token. If you cannot even be bothered to do this basic research and expect people to spoon-feed you, take heed, don’t buy Floki Inu Token or any other cryptocurrency because you haven’t done the necessary due diligence!
Doing a bit of research shows that you can buy the Floki Inu Token on Uniswap or Pancakeswap, which are both Decentralized Exchanges (DEXs). They also seem to be available on Gate.io, which is a small centralized exchange, and other centralized exchanges not listed in the screenshot above.
Now, if you don’t know what Uniswap or PancakeSwap are, you have gotten into the deep end. Start by doing a bit of research on DeFi and how to trade on Uniswap or PancakeSwap. Please do your research and study before you get yourself burnt.
2. You Don’t Understand Why the Transaction Fees are Expensive.
If you know anything about the Ethereum Protocol — which Floki Inu and a whole bunch of other “meme tokens” are commonly deployed on — you may know that all transactions need to be validated on the Ethereum blockchain by “miners.”
To pay “miners” for their work to validate and secure the blockchain, transaction fees (or in the lingo of Ethereum, “gas fees”) must be paid to the miners.
Uniswap, which is a decentralized exchange that runs on the Ethereum blockchain, is notorious for having one of the highest transaction fees in the entire Ethereum ecosystem. The gas fees have only gone up since the London hard fork that took place in August 2021, which was a protocol upgrade (I won’t be covering it here).
Just look at the chart below to see how expensive transactions can get, and keep in mind that these transactions are independent of any additional transaction fees that you may have to pay to the liquidity providers on a DEX such as Uniswap.
It’s clear that costs can quickly add up for the average retail investor.
But what if you still want to buy Floki Inu Token?
You can still try centralized exchanges, or PancakeSwap if you hold Binance Coin (BNB). PancakeSwap has much, much lower fees.
3. You Didn’t Understand What I Just Wrote Above.
If you don’t even know what I was writing about, consider doing a bit more research and study to understand decentralized finance (DeFi), decentralized exchanges (DEXs), automatic marketing makers (AMM), liquidity pools (LP).
Meme Tokens are often traded on decentralized exchanges (DEXs) and require a fair bit of understanding of cryptocurrency and more importantly, the general DeFI ecosystem.
Start studying about DeFi if you really want to buy Meme Tokens.
If you don’t want to go down the rabbit hole of DeFi, don’t buy Meme Tokens.
Stick to trading the major cryptocurrencies that are listed on major exchanges and usually more regulated than the wild frontier of DeFi.
In fact, study more about the basics of cryptocurrency before making any trades or investments.
Otherwise, you will end up paying… and if something goes horribly wrong, no one will refund your hard-earned money.
Which leads me to my next point.
4. You Think A Customer Service Agent Will Refund Your Money if Something Goes Wrong.
As you can see in the screenshot above, this person made a mistake with the crypto address. My heart goes out to this person, who invested his/her/their hard-earned money to support the Floki Inu community, and I wished there was something that could be done to help.
Yet, if you know anything about the DeFi world, you will know that the underlying principle of decentralization also means that Floki Inu is not a company and is thus not a a legal entity.
It also means that it does not have “customer support teams” in the traditional sense of the term. There are no legal entities you can take legal action against.
In any case, if you know anything about cryptocurrency at all, you will know that Floki Inu does not have a native blockchain (since it runs on the Ethereum blockchain).
You will also know that all crypto transactions are irreversible and permanent. This is a feature of cryptocurrency, not a bug.
Be ultra-careful when making any transaction. Make sure you always test with a small amount before making larger transactions.
No one, not the development team can help you restore them. Transactions and contracts run on code, not through the intervention of customer service teams.
This also means that bugs in DeFi smart contracts can happen, through no malicious intent other than buggy and poor programming.
And DeFi, being the unregulated space it is, can be very dangerous to the uninitiated.
5. You Think Your Chosen Token Will Go (Straight) to the Moon.
Let’s be realistic here. Almost every crypto-investor is in it for the money.
Everyone wants to make a fast buck. That’s why people buy meme tokens.
The crypto anthem is “Pump It Up.”
We all want the price to go to the moon.
But that’s not going to happen (right away). Dumps will happen.
In fact, some Meme Tokens turn out to be scams (I’m shocked!).
Like this Squid Game Token, trying to capitalize on the popular Netflix show that has turned into a global phenomenon.
Even mainstream media covered it.
I don’t know about you, but in traditional finance, that doesn’t sound like 45000% gains, it sounds more like 100% loss.
Now, even if it’s not a scam, your token is not going (straight) to the moon. In fact, there was a major drop of over 30% as the Floki Inu Token took a big dump right after the feverish rally from 27–30 Oct 2021.
Beware of FOMO (fear of missing out).
Get used to the volatility. Get used to meme tokens dumping.
Because they are sentiment-driven and will always take you for a wild rollercoaster ride. If you choose to buy meme tokens or any other cryptocurrencies, please be aware of the risks.
Don’t take shortcuts. Really do the study and research.
It will pay off in the long-run by helping you avoid financial diasasters. Even if your token doesn’t go to the moon, at least it won’t crash into the valley of broken financial dreams.
Note: This is not financial advice to buy or sell any asset, digital or otherwise. Please do your own due diligence before trading or investing in any digital assets. I am not affiliated with or paid by any of the websites or links mentioned above.
In the spirit of full disclosure, I own a variety of cryptocurrencies, and also took a small trade on Floki Inu. I have already exited my position for a small profit. At the time of writing this article, I do not own any Floki Inu Token.
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