What is a Memo Tag in Crypto and How to Find It?

If you have ever transferred cryptocurrency and noticed that there is an additional field that is labeled as "Memo," "Destination Tag," or "Message," you might be wondering what is a memo tag is in crypto and why it is important. While a wallet address is used to identify the destination wallet, a memo tag in crypto is an additional identifier that is used to ensure that the funds are sent to the right account when using a shared address.

The use of memo tags is usually necessary when transferring funds to an exchange or a custodial service. This is because, without the memo tag, the system would not be able to identify which user the transaction belongs to. This is why it is important to know what is memo in crypto transfer before actually transferring the assets.

A memo is like a reference number that is attached to your transaction. It is used to ensure that the money sent to a shared wallet is credited to the right person. If the memo is missing or is put incorrectly, the money may reach the platform but may not be credited to your account automatically.

As more people join the world of cryptocurrencies, it has become essential to understand what is a memo when sending crypto. In this guide, we will tell you how memo tags work, which cryptocurrencies support memos, and what happens if you send crypto without memo.

What Is a Memo Tag in Crypto?

A memo tag in crypto is a secondary identifier that is used in conjunction with a wallet address to uniquely identify the intended recipient of a transaction. This is most often required when sending money to services that use a single common wallet address for multiple users, such as centralized exchanges.

Rather than assigning a unique deposit address to each customer, these services assign each customer a unique crypto memo tag, also known as a destination tag, payment ID, or message. This identifier tells the system which account to credit the money to when the transaction is received.

How a Memo Tag Works

When you make a transfer of cryptocurrency that requires a memo, the following two important pieces of information are included in the transaction:

• The wallet address of the platform

• The memo tag that identifies your account

Both of these pieces of information need to be accurate for the transaction to be credited automatically.

Why Platforms Use Memo Tags

Memo tags assist in the management of deposits by exchanges and custodial services. Through the use of a common address with personal tags, they are able to limit the number of wallets they have to manage while still being able to track the funds of each user.

Why Is Memo Important?

Why the crypto memo tag matters is essential in preventing lost or delayed transactions. In the process of transferring funds to exchanges that utilize common wallet addresses, the memo tag is the only means by which the system can distinguish which user the funds are intended for.

• Ensures Funds Reach the Correct Account. If the memo tag is not utilized, the transaction will still reach the wallet on the exchange platform, but it may not be reflected in your account balance immediately. The funds are essentially "unassigned" until they are manually retrieved.

• Prevents Processing Delays. Using the proper memo tag enables exchanges and custodial facilities to complete instant deposits.

• Required for Certain Networks. Some blockchains are dependent on the memo or destination tag system because of their account model. On such blockchains, if you send money without a memo, it may raise issues even though the transaction is completed successfully.

• Reduces Operational Complexity. For platforms, memo tag crypto make it easier to handle deposits as it enables thousands of users to use the same address in a secure manner. For users, it means fewer addresses to handle, but it also means it is their responsibility to enter the correct memo.

Key Takeaway

If your platform has a memo tag for your deposit, it is not optional but mandatory. It is always important to double-check the wallet address and the memo before completing a transaction.

Knowing what is memo in crypto transfer can save one of the most common and expensive errors in crypto transactions.

Which Cryptocurrencies Use Destination Tag Technology?

Not all cryptocurrencies require the use of a memo, although some of the largest blockchains use destination tag technology to target a recipient in a shared wallet system. Understanding which assets use the memo tag crypto transactions can help avoid errors when making a transfer.

Cryptocurrencies That Require Memo or Tag

The following cryptocurrencies typically include memo or destination tag entries:

• XRP (Ripple). The Destination Tag is used to specify the receiving account when transferring funds between exchanges and/or using a custodial wallet.

• XLM (Stellar Lumens). The Memo entry is mandatory and can be a number or text, depending on the exchange.

• EOS. The memo is used to direct the incoming funds to the specific user account.

• BNB (BNB Beacon Chain). The memo is required for deposits to exchanges using shared addresses.

• ATOM (Cosmos). The memo is required on some exchanges to direct deposits to the specific account.

Why These Networks Use Memo Tags

Such blockchains usually function with account-based systems in which the platforms are more inclined to use a single deposit address for multiple users. The memo tag is the internal reference that differentiates each user's funds.

Networks That Usually Do NOT Require Memo

Most other cryptocurrencies, such as Bitcoin and Ethereum, use a separate wallet address for each deposit. In such cases, there is no need for a memo tag crypto since the address is sufficient to identify the receiver.

Always Check Before Sending

As a result of varying requirements for each platform, it is always important to verify whether a memo is required before making a transfer. Exchanges usually provide a warning if a crypto memo tag is required. It is important to know the networks that use this system in order to ensure safe transactions and answer the question of what is a memo tag crypto when sending crypto.

How to Find a Memo Tag for Your Transfer

Locating the proper crypto memo tag is easy once you understand where to find it. The memo tag is always supplied by the platform that is receiving your money and has to be entered just as it is shown.

Step 1: Open the Deposit Page

Visit the exchange or service where you are going to receive the cryptocurrency and choose the asset that you are going to deposit. The platform will provide you with a deposit page that includes all the necessary details.

Step 2: Locate the Memo / Destination Tag

The deposit screen will typically have the following details:

• the wallet address

• the required network

• the memo / destination tag

The memo section may also be labeled as Memo, Destination Tag, or Message, depending on the blockchain.

Step 3: Copy the Memo Exactly

Memo tags are exact identifiers. It is always best to use the copy function offered by the platform to ensure accuracy. A single mistake may mean that your money will not be credited automatically.

Step 4: Check If a Memo Is Required

If you are transferring your cryptocurrencies to:

• an exchange

• a custodial wallet

• a shared wallet

• a memo is required.

If you are transferring your cryptocurrencies to:

• a personal wallet

• a hardware wallet

• a non-custodial wallet

• a memo is not required.

Before you send, it is always best to double-check that the wallet address, network, and memo tag are all the same as the deposit details.