Original title: If you are still in the memecoin trenches, pivot to Casino.
Original author: Foxi (DeFi / AI)
Original translation: TechFlow
My Meme trading account is currently down -60%. Am I a terrible trader? Yes I am. But its not just due to bad decisions, Id like to believe that Im no worse than the average gambler. So whats the problem? Inspired by @0xngmis data (who pointed out that playing Memecoin pays even worse than casinos), I decided to dig deeper to see what the root of the problem is.
First, let me admit it: I am a terrible meme trader.
Like many novices, I was led by the market hype and emotions, chasing highs and selling lows, buying high and selling low, frequent trading caused slippage, and even unknowingly gave my money to insider traders in the market.
Although this is not my first time participating in the cryptocurrency market, this experience made me feel like I was playing an unfair game. What’s worse, the rules of this game seemed to change every moment and always favored those who had more information.
@0xngmi calculated the expected return (EV) of playing roulette at a casino versus the EV of meme speculation (based solely on fees paid).
(Original image from @0x ngmi, compiled by TechFlow)
The fee for small transactions is 2.5%, and the fee for Raydium is 0.25%. One speculation requires two transactions, so the fee needs to be multiplied by 2.
Moonshot’s default slippage setting is 5%, which we took half of as our average sandwich attack estimate.
It’s hard to estimate exactly because it varies a lot between different tokens, but let’s assume the cost per transaction is 2.5%.
This got me thinking: How does meme speculation compare to actual gambling? Are the odds just as bad? Or even worse? More importantly, are meme traders just casino gamblers in the guise of “investors”, or is there a more complex and hidden mechanism behind it? According to @0xngmi’s analysis, it seems wiser to put your money into the casino than to play memes.
The Real Odds: Memecoin and Casinos
We need to talk about expected value (EV), a core concept in betting and trading. It tells us, on average, how much you can expect to win or lose per bet over time.
Casino games have a mathematically fair unfairness. You can always predict how much you will lose in the long run. Lets look at it in detail:
(Original image from Foxi (DeFi / AI), compiled by TechFlow)
In traditional gambling, casinos extract profits in a slow and predictable manner. Every spin of the roulette wheel and every pull of the slot machine follows a known probability model. For example, in American roulette, if you bet on red, you have a 47.37% chance of winning and a 52.63% chance of losing. Over time, the casino will always win, but it is not cheating - it just uses probability to its advantage. However, in order to protect gamblers, some jurisdictions impose minimum return percentages. For example, in Ontario, slot machines must have an RTP (return to player) of at least 85%, which means that the casinos advantage (i.e. the houses cut) is at most 15%.
Why 99% of people lose money trading Memecoin
Unlike a casino, Memecoin trading seems to be a game of chance, but the problem is that you dont even know who the real players are. Although there is no clear house edge in the Memecoin market, your funds will still be slowly eaten up through transaction fees, slippage, insider trading and market manipulation. Moreover, this loss is often hidden and difficult to quantify.
Here are the three main reasons why Memecoin investors generally lose money:
· Handling Fees
Slippage
Market manipulation
1. Transaction Fees: Hidden “Market Maker’s Commission”
Every trade incurs fees. Whether you trade on a centralized exchange (CEX) like @bitgetglobal or @MEXC_Official, a decentralized exchange (DEX) like @RaydiumProtocol, or use a trading bot (like @gmgnai, which most people use), these fees will eat into your profits over time.
CEX Fees: Approximately 0.1% per trade (buy + sell = 0.2% round trip fee)
DEX Fees: ~0.3% per transaction, plus gas fees (which can be $5-$50+ per transaction)
Trading bot fees: ~1% per trade, plus priority fees (can be 4x the normal DEX fee)
Memecoin taxes: Some projects take 5%-10% of each transaction as part of a redistribution or burning mechanism. For example, @aipool_tee charges a 10% fee on sell transactions.
These trading bots are making a lot of money from the bottom users. Although fewer people are trading Meme now (February 17), the daily income can still reach more than $700,000.
On the surface, 0.2%-1% transaction fees may not seem high, but when you trade frequently every day, these fees will quickly add up. Making 10 trades in a day could wipe out 2%-6% of your capital, which is even more than the loss of playing European roulette.
2. Slippage (MEV cost)
Slippage is when you place an order at one price and the actual execution price is worse than expected due to market fluctuations. In Memecoin trading, slippage is particularly problematic, especially when there is insufficient liquidity or volatile markets.
Example: You try to buy a Memecoin with $100, but due to insufficient liquidity, you only get tokens worth $95, a loss of 5%.
A similar situation occurs when selling. You plan to sell at $200, but slippage causes you to only receive $190.
Total slippage loss: approximately 10% of the round-trip transaction cost.
@0xngmi mentioned that about 2.5% of transaction fees are consumed by MEV (sandwich attack cost), and on BNB Chain, this cost may be as high as 5% or more due to its poor infrastructure.
A better blockchain infrastructure can significantly reduce the cost of MEV. This is why many people think Solana is better than BNB Chain (I completely agree). If @cz_binance wants to promote Meme culture on BNB Chain, the first priority should be to reduce the cost of MEV, thereby increasing the expected value (EV) of Memecoin players.
However, even on Solana, the 2.5%-5% MEV cost is still worse than the losses in casino games. If you saw the house cut on a slot machine was as high as 10%, you might be furious. But in the Memecoin market, this is not even the worst part.
3. Insider Trading and Market Manipulation
There is little to say about this. Unlike casinos, which have clear rules, meme markets are completely biased towards insiders. There is no regulation to prevent team wallets, developers, or influencers from harvesting retail traders through pump and dump. For example, the following cases:
$LIBRA: More than $107 million worth of tokens were taken away
$MELANIA: Is it related to Meteroa?
$CAR: African Rugged Event
$CUBA: Rugged event in another country
$GANG: @mrpunkdoteth cashed out $10 million from fans
$Broccoli: Profits from manipulation by scammers and insiders
These are just the tip of the iceberg. Suffice it to say, if you are not an insider like @frankdegods, you have almost no advantage in participating in these Memecoins. In a casino, you at least know what the dealers cut is, but in the Memecoin market, you dont even know who the dealer is, but they are definitely taking your money.
Final Comparison: Expected Value (EV) of Memecoin Speculation vs Gambling
Casino games drain your funds slowly over time, while Memecoin speculation is much more brutal. One wrong trade can wipe out weeks of your gains in an instant. The only motivation to continue playing is the occasional 100x gain. But in reality, the probability of achieving a 100x gain is about 1 in 25,000, which is even lower than the chance of winning the lottery.
People often believe they are special or skilled (yes, Im that conceited guy), but they still get harvested in the end.
What makes Memecoin less like gambling is that it gives people an illusory sense of control - the illusion that money can be made through research, timing and skill. Yes, some traders are able to make money, but they are a minority, just like professional poker players. Most traders, like most gamblers, will eventually lose money.
Suggestions for the chain
If you want to attract users and increase the transaction volume on the chain, make sure the MEV cost of the trader is low enough, and try to reduce the transaction fee through cooperation or fund subsidies. The reason why casinos can operate for a long time is that gamblers are willing to continue to participate.
Advice for investors
If you are speculating in Memecoin, remember that the house always wins. And you won’t know who the house is until it’s too late. If you realize that you can’t pull yourself out, you may have fallen into a gambling addiction.
