A Midsummer Meme's Dream: Investigating Market Manipulations in the Meme Coin Ecosystem

TL;DR

This paper uncovers widespread manipulation tactics in the meme coin ecosystem, revealing how artificial growth strategies and coordinated schemes drive false market interest and significant financial losses.

Contribution

It provides the first large-scale cross-chain analysis of meme coins, identifying novel manipulation methods like Liquidity Pool-Based Price Inflation and their role in market dynamics.

Findings

82.8% of high-return tokens show artificial growth evidence

Over $9.3 million lost by 17,000 victimized addresses

Manipulation strategies often precede profit schemes like pump and dumps

Abstract

From viral jokes to a billion-dollar phenomenon, meme coins have become one of the most popular segments in cryptocurrency markets. Unlike utility-focused crypto assets like Bitcoin, meme coins derive value primarily from community sentiment, making them vulnerable to manipulation. This study presents an unprecedented cross-chain analysis of the meme coin ecosystem, examining 34,988 tokens across Ethereum, BNB Smart Chain, Solana, and Base. We characterize their tokenomics and track their growth in a three-month longitudinal analysis. We discover that among high-return tokens (>100%), an alarming 82.8% show evidence of artificial growth strategies designed to create a misleading appearance of market interest. These include wash trading and a new form of manipulation we define as Liquidity Pool-Based Price Inflation (LPI), where small strategic purchases trigger dramatic price increases. We find that profit extraction schemes, such as pump and dumps and rug pulls, typically follow initial manipulations like wash trading or LPI, indicating how early manipulations create the foundation for later exploitation. We quantify the economic impact of these schemes, identifying over 17,000 victimized addresses with realized losses exceeding $9.3 million. These findings reveal that combined manipulations are widespread among high-performing meme coins, suggesting that their dramatic gains are often driven by coordinated efforts rather than natural market dynamics.