Crypto glossary
Memo and destination tag
A memo or destination tag is an extra identifier some networks, such as XRP, Stellar and Cosmos, use so an exchange knows which customer a deposit belongs to.
On some blockchains, exchanges do not create a separate address for each customer. Instead, all deposits go to one shared address, and a number or text attached to the transaction tells the exchange whose account to credit. On the XRP Ledger this field is called a destination tag; Stellar, Cosmos-based chains, Hedera, TON and others call it a memo or comment.
When withdrawing XRP, XLM or ATOM to an exchange, the deposit screen shows both the address and the memo or tag, and both must be copied exactly. Wallets usually show an optional memo field, which is why people skip it: optional for the network does not mean optional for the recipient. Sending between two self-custodial wallets typically needs no memo at all.
A deposit without the right memo reaches the exchange's address but cannot be matched automatically. Most exchanges can recover it through a support ticket with the transaction hash, often after days and sometimes with a fee. Memos are visible on chain, so they should never contain private information.
Example
A user sends XRP to an exchange but forgets the destination tag; the coins arrive at the shared address, and support credits them a week later after she submits the transaction ID.