According to @AltcoinGordon, the meme coin market is experiencing significant volume dilution due to the proliferation of copycat tokens that launch immediately after an original coin gains traction. Instead of new buyers supporting the original meme coin, traders are increasingly launching their own competing tokens, which fragments trading volume and limits potential price growth for the initial project (source: @AltcoinGordon, June 7, 2025). This fragmentation can lead to reduced liquidity, increased volatility, and diminished returns for traders focusing on the original meme coin, making it essential for market participants to monitor token launches and evaluate liquidity trends before entering positions.

According to Phantom, traders should ensure the authenticity of tokens by using official contract addresses, verifying tokens, and being cautious of transaction warnings. Cross-referencing with the project's official website or CoinGecko is recommended to avoid counterfeit tokens. This is crucial to prevent potential financial loss from fraudulent tokens.

According to Phantom, a common scam in the cryptocurrency market involves copycat tokens that mimic popular tokens by using similar names, icons, and symbols. These fraudulent tokens often have slight variations in their contract address designed to deceive traders into purchasing them. This tactic can lead to significant financial losses for unsuspecting investors. Traders are advised to verify contract addresses and exercise caution before making any purchases. Source: Phantom's Twitter post on February 21, 2025.