Buy $100 worth of crypto and get a bonus $10

  • Trade crypto and digital assets
  • Significant sign-up bonuses
  • The most trusted finance platform

Disclaimer: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. Your capital is at risk. This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) &USA (by eToro USA LLC) which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.

  • Home
  • >News
  • >Ask CryptoVantage: What Are Memos? Do I Need One to Send Crypto?

Ask CryptoVantage: What Are Memos? Do I Need One to Send Crypto?

If you’re a cryptocurrency exchange user and have gone to deposit Steller (XLM), Cosmos (ATOM), or a variety of other cryptocurrencies, the platform likely gave you a memo to include with your deposit.

You may have already figured out what these do, but if you’re new to using exchanges or to an asset that uses a memo, you may be confused. In this edition of Ask CV, we’ll cover what memos are, why they’re needed, and more.

Crypto memo

What Are Memos and Why Are They Necessary?

Memos are an additional address component that helps identify a recipient beyond the receiving address. You’re probably already wondering why there would be more than one recipient at a receiving address. The answer is actually pretty straightforward: Memos are primarily for centralized exchanges.

Centralized exchanges like Coinbase and Binance don’t want to create a new wallet address for every single user that wants to deposit something like Hedera (HBAR). Instead, they use a memo to determine to which account they should credit the received funds and then only have to use a single or few addresses themselves. This saves them from creating extra infrastructure for users.

Each exchange will generate a unique memo for you when you attempt to deposit crypto and you’ll use that going forward.

What is a Destination Tag or Message?

Destination tags or messages are ostensibly the same thing as memos. The only difference is the same that is used to describe the information required to credit assets to an account.

Memos, destination tags, and messages can be in the form of numbers or letters.

What Crypto Assets Use Memos, Destination Tags or Messages?

There are quite a few cryptocurrencies that use memos, destination tags, or messages. Below we have put them into a table.

Note that Algorand (ALGO) only uses memos for voting on governance proposals, it isn’t necessary for sending transactions to an exchange.

Here’s a look at the various cryptocurrencies that utilize the memo system:

Cryptocurrency
Address Identifier
Description
Cosmos (ATOM)
Memo
Numeric Only
Binance Coin (BNB)
Memo
Numeric Only
EOS (EOS)
Memo
Numeric Only
Stellar (XLM)
Memo
Alpha-numeric
Stacks (STX)
Memo
Alpha-numeric
Ripple (XRP)
Destination Tag
Numeric Only
Algorand (ALGO)
Memo
Alpha-numeric
Hedera (HBAR)
Memo
Numeric Only
NEM (XEM)
Memo
Numeric Only

What Happens If I Send Funds Without the Memo?

This depends on a couple of factors. If you are withdrawing from an exchange to your own wallet, then there is no need to worry if you didn’t include the memo. This is because you are the only one at that address, meaning no other account needs to be credited.

If you are sending the funds to an exchange, then you may have a problem on your hands. Centralized exchanges are likely only using one or two addresses for that asset and then using the memo as a way of identifying who sent what. Some exchanges say that there is no guarantee they can recover your funds if you send assets to them without a memo, but this isn’t fully true.

As long as you can contact their support team and provide them with information such as the address you sent from, the time, amount, etc., then they should be able to credit your account with the funds. This is because regardless of whether you included the memo, they will still receive your deposit. It just won’t have the memo for them to figure out who sent the funds. So, if you can provide that information to their support team, then they can verify it was you who sent the funds and credit your account appropriately.

Closing Thoughts

To sum up, memos are identifiers used by centralized exchanges to figure out who to credit deposited funds to. They need them because they tend to only use a one or two receiving addresses for certain cryptocurrencies.

While you aren’t out of luck if you forgot to include it with your deposit to an exchange, it will certainly save you time and a potential headache if you do.

Article Tags
Evan Jones Headshot

About the Author

Evan Jones

Evan Jones was introduced to cryptocurrency by fellow CryptoVantage contributor Keegan Francis in 2017 and was immediately intrigued by the use cases of many Ethereum-based cryptos. He bought his first hardware wallet shortly thereafter. He has a keen and vested interest in cryptos involving decentralized backend exchanges, payment processing, and power-sharing.

Back To Top