If you’re a cryptocurrency exchange user and have gone to deposit Stellar (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.
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.
👉 Learn how to secure your crypto transactions
What Is a Destination Tag or Message?
Destination tags or messages are ostensibly the same thing as memos. The only difference is the term 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’ve listed them in a table.
Note that Algorand (ALGO) only uses memos for voting on governance proposals—it isn’t necessary for sending transactions to an exchange.
| Cryptocurrency | Memo Required? |
|---------------|----------------|
| Stellar (XLM) | Yes |
| Cosmos (ATOM) | Yes |
| Hedera (HBAR) | Yes |
| Algorand (ALGO)| No (Governance Only) |
What Happens If I Send Funds Without the Memo?
This depends on a couple of factors:
- Withdrawing to a Personal Wallet: No need to worry—the funds will arrive since you’re the sole owner of the address.
- Depositing to an Exchange: Exchanges rely on memos to credit the correct account. Forgetting a memo means your funds may not be automatically credited.
However, exchanges can recover your funds if you provide transaction details (sender address, amount, timestamp) to their support team. While it’s possible, it’s a hassle—so always double-check the memo!
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Closing Thoughts
To sum up:
- Memos help exchanges credit deposits correctly.
- Always include them when sending to exchanges.
- Recovery is possible but time-consuming—precision saves trouble.
FAQ
Do All Cryptocurrencies Require Memos?
No—only specific assets like XLM, ATOM, and HBAR need them for exchange deposits.
Can I Recover Funds Sent Without a Memo?
Yes, but you’ll need to contact the exchange’s support team with transaction proof.
Are Memos Case-Sensitive?
It depends on the exchange—always copy the memo exactly as provided.
About the Author
Evan Jones
Evan Jones has been active in cryptocurrency since 2017, specializing in decentralized finance (DeFi) and secure wallet practices.
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