Solana-based meme coins have been trending since late 2023, and if you have paid attention, you understand their potential to bring massive gains. If you are considering investing in these tokens, you must adopt a solid strategy. This guide explains all you need to know about Solana meme coins and demonstrates how to profit from them.
Understanding Solana
Before teaching how to profit from Solana-based meme coins, it is important we undertand what the Solana blockchain is all about. Simply put, Solana is a network developed to facilitate the creation of decentralized applications and tokens. It boasts high speeds and considerably low transaction costs.
Understanding Meme Coins
So, what are meme coins? They are digital currencies whose prices are influenced solely by social media sentiments. When these sentiments are positive, meme coins tend to rally significantly and can crash quickly when the hype fades.
Most meme coins draw inspiration from internet memes, while others are inspired by political events and public figures. As of August 2024, the leading meme coins on Solana based on market caps are Dogwifhat, Popcat, Bonk, BOME, and MEW.
How to Make Money Trading Solana Meme Coins
You now have a clear understanding of meme coins, so it is time to learn how to generate money by trading them.
Research Thoroughly
Most meme coins are usually scams. Therefore, doing your homework before investing in any is crucial. Firstly, when you come across a meme coin, seek more details about the developer behind it to ensure they are committed to developing their project. This helps you avoid investing in rug pulls.
Secondly, find out whether the meme coin you are interested in aligns with the current trend because, as mentioned earlier, meme coins rally when their popularity surges on social media platforms. Lastly, study the community behind the meme coin. Make sure the community members are active before buying the token.
Set Up a Solana Wallet
Most Solana meme coins are listed on decentralized exchanges, such as Raydium. Therefore, you need a non-custodial wallet compatible with the Solan blockchain to buy these tokens. Some top Solana wallets include Sollet and Phantom. For the purpose of this guide, we’ll use Phantom.
Setting up a Phantom wallet involves easy steps. After downloading the wallet’s browser extension from Phantom.app, choose the “Create New Wallet” option to generate a new Phantom wallet. Next, store the displayed secret recovery phrase somewhere safe, as you’ll need it to access the wallet if you forget your password.
After setting up your wallet, fund it with some SOL to start investing in your favorite meme coins.
Select a Solana Meme Coin to Buy
We recommend using the tips mentioned earlier when selecting a meme coin. Also, consider your risk tolerance. Given the unpredictable nature of meme coins, determine how much you’re willing to lose if the token you want to invest in doesn’t rally.
Buy the Meme Coin
After finding the right meme coin and funding your Solana wallet, go ahead and place a buy order. But how do you do this? Here are the steps to follow:
1. Pick a decentralized exchange: Many Solana meme coins can be traded on Raydium and Orca. Choose any of the two exchanges to buy your ideal token.
2. Connect your Solana wallet: Use the “Connect Wallet” functionality to link your Phantom wallet with the selected decentralized exchange.
3. Place a buy order: To purchase a meme coin, choose “SOL” in the “From” box and your ideal meme coin in the “To” box. Next, specify the amount of SOL you wish to spend on the meme coin and click “Swap” or “Exchange.”
Once the decentralized exchange executes your order, the purchased meme coin will be deposited into your Solana wallet.
Final Thoughts
After buying a Solana meme coin, track its price constantly and sell it when it reaches your desired take-profit level. You can also consider selling if the buzz around it starts fading to cut possible losses.
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