A Full Review of Magic Ethereum Money (MEM) – Is It Legit?
Cryptocurrency has a lot of memes associated with it. One of the most well-known and oldest cryptocurrency memes is an MS Paint image of a wizard with “Magic Internet Money” written next to it.
This meme was used to promote the Bitcoin subreddit (r/Bitcoin) in the early days of the cryptocurrency.
Now, there has recently been a trend of tokens emerging based around memes, so it makes sense that a token would launch that uses one of the original cryptocurrency memes as its name.
Anyway, this article will tell you everything you need to know about Magic Ethereum Money (MEM).
What is Magic Ethereum Money (MEM)?
Magic Ethereum Money (MEM) is a Pump as a Service (PaaS) token, which means it’s a token that uses taxes collected from transactions to purchase tokens and drive the price up.
The MEM whitepaper explains that this is done so the token continuously reaches new all-time highs that will attract more investors into the project. Projects that fail to achieve new all-time highs quickly fade out of discussion, so this is essential to maintain prolonged attention.
Basically, the marketing expense for MEM is not paying influencers to discuss the token – it’s buying and burning tokens with the taxes collected.
That said, a portion of the taxes collected from transactions are collected and distributed back to holders.
This is not a particularly difficult token to understand. We do find it an interesting way to generate attention, but it does have some fundamental problems that we will discuss in a later section.
When Was Magic Ethereum Money (MEM) Launched
MEM was launched on February 22, 2022 by a group of anonymous developers.
Magic Ethereum Money (MEM) Tokenomics
MEM has some very unique tokenomics that we have not seen with other cryptocurrency projects. This is especially apparent when it comes to how the token handles inflation.
As for the basics, the token has a 1 trillion maximum supply. There is 10% buy and sell tax. The buy tax is reflected back to holders in direct proportion to how much of the total supply they hold in their wallet. The tax on sales is sent to the treasury wallet for buybacks and further marketing.
The token handles inflation of the token by increasing the percentage of MEM in wallets proportionally to the amount of new supply added to the ecosystem. For instance, if the total supply increases by 1%, then the amount of MEM in your wallet will increase by 1%.
The whitepaper claims that this leads to exponential growth for holders due to the reflections being paid at a higher rate. We do not quite see that logic as 1% of the total supply is still always 1%.
Our Problem With Magic Ethereum Money (MEM)
We have a few problems with Magic Ethereum Money (MEM) and do not fully buy into the thesis presented in the whitepaper.
Our first major issue is that this token appears to be some form of Ponzi scheme or pyramid scheme. Yes, we know the popular saying in DeFi that everything is a Ponzi scheme.
This appears more like a Ponzi scheme than many other DeFi 3.0 projects, though.
First of all, the project makes some fairly outlandish claims about exponential growth for holders due to the reflections staying proportionate to the increasing size of the holdings. Of course, this exponential growth is predicated on an increasing number of investors into the project.
Tokens that reflect a transaction tax back to holders sound suspiciously like a Ponzi or pyramid scheme. And those never work in the long-term.
This brings us to our second major problem with this project:
It has no utility other than making money.
Projects that’s only utility is attracting more investors (remember what we said about a Ponzi scheme?) always fail. You could say that meme coins have seen success, but memecoins have more utility than making money.
They are an exercise in decentralized community building. Forums, memes, cultural references, merchandise, and a community emerge around memecoins. Meme coins are more similar to NFTs than they are to cryptocurrencies in that regard.
You will not see that type of community forming around a token like MEM as it attracts a different type of investor.
Our third and final problem with MEM relates to the buyback program. These type of programs sound great on the surface.
The reality of the situation is different when you apply some simple arithmetic to how the buyback works.
10% of the total value of a sell transaction is used for a buyback. 10% is not 100%, so the buyback will not have enough funds to prevent a mass sell-off from negatively impacting the price of the token.
It’s not a sustainable model.
Is Magic Ethereum Money (MEM) a Scam?
It’s hard to know whether a crypto project with an anonymous development team is a scam or not. We do not believe that MEM is a scam, though.
It does appear to be a serious project. The whitepaper is very well-written and appears very serious, which does not mean it’s legitimate, but it definitely helps give that appearance.
Again, it’s hard to know the legitimacy of a two week old project launched by anonymous developers. There are far too many scams in cryptocurrency for a hardened investor to take the word of an anonymous development team.
Our problem with MEM relates to the idea of the project more than anything. Memecoins see success because they take the time to build a community around the token. This community drives the price upwards. MEM is attempting to take a shortcut by skipping the early stages of community growth and jumping straight for the new daily all-time high stage by clever token price manipulation that artificially increases the price.
They call this Pump as a Service (PaaS), which we do not see as a viable strategy for sustained long term growth. Yes, the project can experience tremendous growth in the short-term as the first batch of investors go into the project.
Jumping straight to achieving all-time highs without a community, MEM has no community, is not a natural progression of a cryptocurrency. Cryptocurrencies typically start out with a utility, attract a small base of users to form the initial community, and expand outwards from there.
For those reasons, the project will most likely fail as it can only attract so many people to it before it runs out of new investors. And without investors, the project does not have a solid community surrounding it to fall back on like more community focused cryptocurrencies do during a bear market.
To summarize, MEM is probably not a scam (hard to know, though). It is simply attempting to hit all-time highs on a daily basis before forming a solid community, which we believe to be a terrible strategy for any type of long-term growth despite it working well for short term growth.
Is MEM a Good Investment?
We do not see MEM as a good investment. It will likely experience tremendous growth in the very short-term, though.
However, it’s likely the type of project that you do not want to hold for the long-term. We estimate that the project will die out within 6 months as the newness of the project fails and the buybacks cannot outpace the massive sell pressure.
That covers it for everything you need to know about Magic Ethereum Money (MEM). We have little to no faith in this project despite the story that the developers have painted in the whitepaper.
It just sounds too much like a Ponzi or pyramid scheme for us to believe in it. More importantly, the project has no focus on building a community. A cryptocurrency must have some form of community in order for it to see any type of long-term success. Projects without community typically get a lot of excitement in the beginning and quickly lose it at the first sign of a price decrease.