Shitcoin Explained: The Complete Guide for Crypto Creators
A 'shitcoin' is a slang term for a cryptocurrency with little to no inherent value, serious development, or long-term purpose, often created as a joke or for speculative trading. These tokens, frequently meme-based, are launched quickly on blockchains like Solana to capitalize on hype. While high-risk for investors, they present a specific opportunity for creators to build community and generate revenue through trading activity.
Key Points
- 1A shitcoin is a low-value, often meme-based cryptocurrency launched primarily for speculation and community hype.
- 2They are characterized by rapid launches, high volatility, and frequently lack a functional product or roadmap.
- 3Creators use platforms like Spawned to launch on Solana for speed and low cost, earning a 0.30% fee on every trade.
- 4Major risks include 'rug pulls,' extreme price swings, and high likelihood of the token going to zero.
- 5Successful launches depend on strong social media marketing and community engagement from the start.
What Exactly is a Shitcoin?
Beyond the meme, a shitcoin has specific technical and cultural markers.
In crypto slang, a 'shitcoin' refers to a cryptocurrency token that is considered to have little to no long-term value or utility. The term is subjective but generally points to tokens created as internet jokes (meme coins), for pure speculation, or as quick cash grabs. Unlike established projects like Ethereum or Solana, which have extensive developer ecosystems and real-world use cases, a shitcoin's primary 'use case' is often its own community-driven trading.
Key identifiers include:
- Meme or Joke Origin: Many are inspired by viral internet memes, animals, or absurd concepts.
- Minimal Development: The website and token might be the only deliverables, sometimes built in hours using tools like our AI website builder.
- Hyper-Speed Launch: On Solana, a token can be created and live for trading in under 5 minutes.
- Concentrated Ownership: The creator often holds a significant portion of the total supply, influencing price.
How a Shitcoin Launch Works: A 4-Step Process
From idea to market in under an hour. Here's the playbook.
Understanding the launch mechanics is crucial for any creator. Here’s the typical lifecycle on a Solana launchpad like Spawned.
- Concept & Token Creation: A creator defines a meme, name (e.g.,
SLOTH,WIFHAT), and tokenomics. Using a launchpad, they deploy a SPL token on Solana. This costs a small fee (e.g., 0.1 SOL on Spawned) and takes seconds. - Initial Liquidity & Launch: The creator adds initial SOL to create a liquidity pool. This sets the starting price. Platforms like pump.fun use a bonding curve, while Spawned facilitates a standard pool. The token is now live and tradable.
- The Marketing Sprint: Success depends entirely on the first 24-48 hours. Creators blast social media (Twitter, Telegram) to attract buyers. The goal is to create a self-sustaining hype cycle.
- Graduation or Collapse: If the token reaches a market cap threshold (often $50k-$100k), it 'graduates' to a full decentralized exchange like Raydium. This is where a launchpad like Spawned activates its 1% perpetual fee model via Token-2022. If it fails to gain traction, liquidity dries up and the token becomes worthless.
For Creators: Benefits vs. Real Risks
Weighing the quick upside against the permanent downsides.
Launching a shitcoin isn't just a gamble for buyers; it's a strategic move with clear trade-offs for creators.
| Aspect | Potential Benefit | Concrete Risk |
|---|---|---|
| Revenue | Earn 0.30% of every trade. On $1M volume, that's $3,000. Spawned adds ongoing 0.30% holder rewards. | Token fails to attract volume, generating no fees. |
| Cost & Speed | Launch for ~0.1 SOL ($20) in minutes. Includes an AI-built website, saving $29-99/month. | Capital locked in initial liquidity is at risk if the launch fails. |
| Community | Can rapidly build a dedicated following of thousands. | Community can turn hostile if price falls, leading to harassment ('degen' backlash). |
| Legal & Reputation | Operates in a regulatory gray area; can be seen as a 'fun' community experiment. | High risk of being accused of a 'rug pull' (scam), even if unintended. Can damage personal reputation in crypto. |
The most significant risk is the 'rug pull,' where creators maliciously drain the liquidity pool, stealing investors' funds. This is why platform choice and transparent behavior are critical.
Launchpad Showdown: Where to Launch Your Token
Choosing where to launch directly impacts your potential earnings and project tools.
Not all launch platforms are equal. Here’s how Spawned’s model for creators differs from the most popular alternative, pump.fun.
- Creator Revenue:
- Spawned: 0.30% fee on every trade. Direct, ongoing income.
- pump.fun: 0% fee for creators. You profit only from your own token holdings.
- Holder Incentives:
- Spawned: 0.30% of trades are redistributed to token holders, encouraging holding.
- pump.fun: No built-in holder rewards.
- Post-Graduation Model:
- Spawned: Uses Token-2022 to enforce a 1% perpetual fee on transactions after graduation, creating a long-term revenue stream.
- pump.fun: No ongoing fee structure after graduation.
- Tools & Cost:
- Spawned: Launch fee of 0.1 SOL includes an AI website builder.
- pump.fun: Lower upfront cost, but no website tool (external cost/time).
For creators focused on building a project with recurring revenue, Spawned’s fee model provides a tangible financial incentive beyond pure speculation. For a simple guide on starting, see our beginner's page.
The Verdict: Should You Launch a Shitcoin?
A clear, no-BS recommendation based on the reality of the market.
Launching a shitcoin is a high-risk, high-reward tactic suitable only for creators who understand it's a marketing and community-building exercise first, not a tech project.
Consider launching if:
- You have an engaged social following or understand crypto meme culture.
- You are transparent about the token's speculative nature and treat your community fairly.
- You view the 0.30% trading fee as a potential revenue stream, not a guaranteed income.
- You're prepared for the possibility of losing your initial 0.1 SOL + liquidity deposit.
Avoid launching if:
- You expect to build a 'serious' long-term project from day one (consider a different token model).
- You cannot commit to intense, real-time community management for the first 48 hours.
- The legal gray areas or potential reputation damage concern you.
For those who proceed, using a platform like Spawned that provides built-in revenue (0.30%/trade), holder rewards, and an AI website creates a more structured foundation than a zero-fee, tool-less launch.
A Creator's Checklist for a (Less Risky) Launch
Execution matters more than the idea. Follow these steps.
If you decide to launch, this list can help mitigate some risks and improve your odds.
- Secure Social Handles First: Get the Twitter/X, Telegram, and Discord names before the token goes live.
- Be Transparent: Clearly state your token allocation. If you keep 20% for yourself, say so. Surprises destroy trust.
- Prepare Content: Have memes, graphics, and a basic story (the 'lore') ready to post immediately after launch.
- Start Small with Liquidity: You don't need 50 SOL to start. A smaller, organic pool can grow healthier. Be prepared to add more if momentum builds.
- Engage Relentlessly: Answer every question in Telegram. Be the most active person in your own community.
- Plan the Next Step: Have a vague 'roadmap' idea (e.g., "if we hit $100k MC, we'll do a merch drop") to give holders a goal.
- Understand the Fees: Know exactly how your launchpad's fee structure works. On Spawned, remember the 0.30% creator fee and the 1% post-graduation fee.
For a deeper dive into the potential upsides, read our page on shitcoin benefits.
Ready to Launch Your Concept?
Your meme, your community, your revenue stream.
Shitcoins are a unique phenomenon in crypto, blending culture, technology, and pure speculation. For creators, they represent a low-barrier entry point to token creation and community building, with a clear, if risky, monetization path through trading fees.
If you have a meme, a community, and understand the risks, launching on Solana is the fastest path to market. Spawned is built for creators who see this as a potential business, not just a one-off joke.
Why start with Spawned?
- Earn from Day 1: Get 0.30% of every trade, immediately.
- Reward Holders: Our unique 0.30% holder reward builds stronger community loyalty.
- Launch with Tools: Your 0.1 SOL fee includes an AI-powered website, saving you time and money.
- Long-Term Model: The 1% Token-2022 fee after graduation creates a sustainable project income.
Launch your token now on Spawned and turn your idea into a tradable asset in minutes.
Related Terms
Frequently Asked Questions
Not exactly. All meme coins can be considered shitcoins, but not all shitcoins are memes. 'Shitcoin' is a broader, derogatory term for any token with low value or utility. A meme coin is a type of shitcoin specifically based on an internet meme or joke culture (like Dogwifhat). Some shitcoins might have a serious-sounding name but still lack any real development or purpose.
Intent is the key difference. A shitcoin may be frivolous and likely to fail, but it's often launched openly as a speculative experiment. A scam coin (or 'rug pull') is created with the premeditated intent to defraud investors. The creator will deliberately drain the liquidity pool and disappear. Many shitcoins fail honestly due to lack of interest, while scam coins are a deliberate theft.
Earnings are highly variable and depend entirely on trading volume. With Spawned's 0.30% creator fee, a token with $1,000,000 in total trade volume generates $3,000 for the creator. A viral token might see $10M+ volume, yielding $30,000. However, the vast majority of tokens see minimal volume and generate little to no fees. Success requires significant marketing effort.
Solana offers extremely low transaction fees (fractions of a cent) and very fast block times. This allows creators to launch a token for about $20 and enables traders to buy and sell with minimal cost. This low-friction environment is perfect for the high-volume, rapid-fire trading that shitcoins involve. Ethereum's high gas fees make similar launches economically impractical.
Graduation is when a token moves from its initial launch platform (like a bonding curve on pump.fun or a initial pool on Spawned) to a full decentralized exchange (DEX) like Raydium. This usually happens when the token reaches a specific market cap (e.g., $50k). It provides greater liquidity and accessibility. On Spawned, graduation also triggers the activation of the 1% perpetual fee model using Solana's Token-2022 standard.
No. Platforms like Spawned and pump.fun have made token creation a no-code process. You follow a simple web interface: name your token, set a symbol, upload an image, and provide initial SOL for liquidity. The entire technical deployment is handled by the platform. The included [AI website builder](/glossary/ai-website-builder) also creates a basic site without coding.
First, failing to market before and immediately after launch. A token with no social buzz is dead on arrival. Second, not being transparent about their own token holdings, which leads to instant distrust. Third, neglecting their community Telegram/Discord after launch. Fourth, putting too much personal SOL into initial liquidity, risking a significant loss if the launch fails.
This is a unique feature of the Spawned launchpad. In addition to the 0.30% fee for the creator, another 0.30% of every trade is automatically distributed to all existing holders of the token proportionally. This creates a small, continuous dividend effect, encouraging people to hold the token rather than just trade it, which can help stabilize the community and price.
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