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

ArXiv ID: 2507.01963 “View on arXiv”

Authors: Unknown

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.

Keywords: Meme Coins, Market Manipulation, Wash Trading, Liquidity Pool Inflation, Cross-Chain Analysis, Cryptocurrencies

Complexity vs Empirical Score

• Math Complexity: 1.0/10
• Empirical Rigor: 9.0/10
• Quadrant: Street Traders
• Why: The paper presents a large-scale empirical analysis with a curated dataset, clear detection methodologies, and quantified financial impact, requiring minimal advanced mathematics. Its focus is on data processing and real-world findings rather than theoretical derivations.

  flowchart TD
    A["Research Goal: Investigate Market Manipulations<br>in the Meme Coin Ecosystem"] --> B["Data Collection & Scope"]
    B --> C["Longitudinal Analysis"]
    C --> D["Computational Detection"]
    D --> E["Key Outcomes & Findings"]
    
    subgraph B ["Data/Inputs"]
        B1["34,988 Tokens"]
        B2["4 Chains: Ethereum, BNB, Solana, Base"]
        B3["3-Month Period"]
    end
    
    subgraph C ["Methodology"]
        C1["Tokenomics Characterization"]
        C2["Growth Tracking"]
    end
    
    subgraph D ["Analysis"]
        D1["Wash Trading Detection"]
        D2["LPI Identification<br>Liquidity Pool-Based Price Inflation"]
        D3["Exploit Pattern Mapping<br>Pump & Dump / Rug Pull"]
    end
    
    subgraph E ["Findings"]
        E1["82.8% of High-Return Tokens<br>use Artificial Growth Strategies"]
        E2["17,000+ Victim Addresses"]
        E3["$9.3M+ Realized Losses"]
        E4["Manipulations form Foundation<br>for Profit Extraction"]
    end