A destination tag (also called a "memo" on some networks) is a short extra ID you include with certain deposits, like XRP or Stellar. It tells an exchange which customer a payment belongs to, because the exchange shares one deposit address among many users. Forgetting it can misplace your funds.
Why it exists
On networks like the XRP Ledger and Stellar, an exchange often uses a single deposit address for all its customers. The destination tag is the extra number that identifies your specific account, so the exchange can credit the deposit correctly [1]. Sending to your own personal wallet usually doesn't need a tag — it mainly matters when depositing to a shared exchange address [2].
Using it correctly
The bottom line
A destination tag or memo is simply an extra ID that routes a deposit to the right account on a shared address. When an exchange gives you both an address and a tag for coins like XRP or XLM, you must include both — leaving the tag out can leave your deposit unassigned and needing support to trace. When in doubt, copy the tag exactly as shown and send a small test first. To keep learning the fundamentals, follow more from Bitbase Academy.
Disclaimer: This article is educational content from Bitbase Academy, provided for information only. It does not constitute investment, trading, tax, or financial advice. Crypto assets are volatile; assess your own risk. Written as of June 2026; refer to the latest official information.
References
[1] Coinbase, "What is a crypto wallet address?" coinbase.com
[2] Ledger, "How do crypto wallets work?" ledger.com
