Trends Behind the Pump.fun Issue Coin Craze: Exiting and Catch a Falling Knife

Recently, the token issuance of Pump.fun has become the market focus. This event has been brewing since June, continuously fermenting amid various expectations and doubts, and finally landed officially on July 12. Although there are many doubts about its $40 billion valuation in the market, the actual data shows that investor enthusiasm remains high. The public offering was sold out in just 12 minutes, and some investors even expressed dissatisfaction on social media for missing the opportunity.

At present, Pump.fun has delivered a relatively satisfactory answer. After its launch, the token price has shown a steady upward trend. Today, Pump.fun also announced the first token buyback using transaction fees. However, whether the coin price can maintain a high level in the long term remains a question in the minds of many.

In this round of the bull market, Pump.fun is undoubtedly one of the most eye-catching applications. It has successfully pushed MEME tokens to new heights, with its fair launch concept and convenient operation model completely breaking the high barriers of traditional issuance models. The enticing prospect of creating a token for just 3 dollars still maintains a high level of attraction, even as the MEME craze gradually fades.

From a mechanism perspective, Pump.fun does not have a pre-sale or private placement phase; the entire process is priced by smart contracts, and even has a graduation mechanism. When the market cap reaches $69,000, it automatically creates a liquidity pool on decentralized exchanges. This nearly fully automated coin listing process is well-received in the market and has made Pump.fun one of the strongest sources of income in this market cycle.

Since its launch in January 2024, Pump.fun has issued a total of 11.44 million tokens, with over 22 million unique addresses using the platform, accumulating nearly $720 million in revenue. Among them, the highest daily transaction fee revenue reached $5.43 million, and the peak daily revenue was as high as $15.88 million. It can be said that the dividends of this round of the MEME market have almost all been captured by Pump.fun, further promoting the development of the Solana ecosystem.

However, this project that originated from MEME suddenly announced the issue coin, sparking widespread discussion in the market. The rumors of Pump.fun issuing coins first emerged in February this year, when it was reported that they planned to issue coins on a centralized exchange and had even prepared complete issuance documents, but later it was put on hold due to market fluctuations. In June, the rumors of issuing coins heated up again, with media reporting that Pump.fun planned to raise $1 billion through token sales, with a valuation of $4 billion.

On July 10, Pump.fun officially announced that it will launch the public sale of its native token PUMP at 22:00 on July 12, and the airdrop will also begin shortly. This sale plans to issue 150 billion coins at a unit price of 0.004 USDT, accounting for 15% of the total supply of (1 trillion coins ). Based on a valuation of 4 billion USD, it is expected to raise 600 million USD. Due to compliance reasons, users from the UK and the US are not allowed to participate in this sale.

In the PUMP token economic design, 33% is used for public sale, 24% is used for community and ecological incentives, 20% is allocated to the team, 2.4% is used for the ecological fund, 2% belongs to the foundation, 13% is allocated to existing investors, 3% is used for live broadcasting related activities, and 2.6% is used for liquidity and exchanges.

However, compared to the previous anticipation for issuing coin, a collective pessimistic sentiment emerged in the market as the issuance approached. The controversy mainly centered around the $4 billion valuation. It is worth noting that the leading stablecoin Circle, which recently listed on the New York Stock Exchange, has a valuation of only around $7 billion. An on-chain application claiming a valuation of $4 billion, even exceeding that of most current DeFi blue-chip protocols, has led the market to believe it is overextending its future liquidity.

Moreover, it is crucial to note that the current market environment has changed. Looking at the current cryptocurrency market, apart from a slight rebound in the past few days, most altcoins and MEME tokens are performing rather poorly. The trading volume reflects this, as data shows that Pump.fun reached a peak trading volume of 5.44 million dollars on January 23, 2025, after which it exhibited a steep decline. Recently, the daily trading volume has stabilized below 700,000 dollars, representing a drop of 87.2% from its peak. In terms of the number of tokens created, the daily creation rate has plummeted from a peak of 70,000 to around 30,000, almost halving. The graduation rate of tokens is also astonishingly low, with a graduation rate of 1.6% in 2024, but now it has fallen below 1%. These statistics clearly indicate that the enthusiasm for the MEME market is rapidly fading, and user participation is also declining swiftly.

Despite how powerful Pump.fun is, it is essentially just a tool that relies on the popularity of the MEME market. This is also one of the reasons why the market questions its valuation.

On the other hand, the market size is shrinking, but competitors are rising. Pump.fun, which once held a dominant position, is now facing pressure. Recently, the competitor letsbonk.fun, centered around BONK, has developed rapidly, surpassing Pump.fun in the number of tokens issued multiple times and briefly taking the top position in market share. Although Pump.fun has quickly retaliated, the competition between the two remains fierce, and it must be acknowledged that Pump.fun's leading position is under threat.

It is precisely based on these factors that Pump.fun's $4 billion valuation has come under severe scrutiny. After rumors of issuing coins surfaced in June, the market experienced a risk-averse sentiment, and popular MEME tokens in the Solana ecosystem generally retraced, with capital flowing out rapidly. Some industry insiders even stated that this ICO is more like a liquidity exit rather than a long-term development plan, and some cryptocurrency researchers pointed out that Pump.fun is staging a complete "harvesting operation."

Interestingly, in March 2024, the co-founder of Pump.fun stated on social media that every presale is a scam. Coincidentally, Pump.fun chose to issue coins in the form of a presale, pulling off a face-slapping operation. The token issuance raised a total supply of 33%, with 18% allocated to institutional private placement and 15% to public offering, and all coins were fully unlocked on the first day of listing.

From the final results, although industry insiders are not optimistic, the attitudes of supporters and institutions are completely different. From the public sale situation, within just 12 minutes, the PUMP token completed a public fundraising amount of 500 million USD. Several large exchanges participated in the PUMP public sale. According to data, the number of wallet addresses that participated in the pre-sale on Pump.fun and completed KYC is 23,959, and the number of wallet addresses that successfully purchased is 10,145, with an average subscription amount of 44,209 USD. 89.7% of the PUMP token pre-sale was completed through the official website, while the total amount sold on various exchanges accounted for only 10.3%. Among the official pre-sale addresses, small-scale users are the main group, with 5,758 users subscribing for PUMP within 1,000 USD, while the number of addresses with subscriptions exceeding 1 million USD is 202, also showing the enthusiasm of institutions.

The entire process perfectly illustrates the unique contradictory psychology of the cryptocurrency market. Due to technical issues with some exchanges' public offerings, users found it difficult to complete their subscriptions, which led several users to express their dissatisfaction on social media. At that time, there was also significant controversy within the community regarding the subsequent performance of PUMP. One side believed that the valuation was too high and that it would inevitably collapse after the spotlight effect ended; the other side believed that Pump, as the most representative product of MEME, had a complete revenue logic and cognitive foundation, and would not easily drop.

At this stage, the latter seems to have temporarily achieved victory. After its launch on July 15, PUMP briefly fell from $0.0065 to $0.0042, but after some fluctuations, it began to rise, currently reported at $0.0066, which is a 55% increase compared to the fundraising price of $0.004. The market value has also risen from $4 billion to $6.6 billion, bringing certain profits to the subscribers.

Of course, this part of the price increase is also influenced by human factors. According to on-chain analysis, as of 8 AM this morning, Pump.fun began using transaction fee income to buy back PUMP after issuing the coin. In the past 7 hours, 187,770 SOL of transaction fee income has been transferred to a designated address, purchasing PUMP and then transferring the acquired tokens to another address for storage. A total of 111,953 SOL(, approximately 1.83 million USD), has been used to purchase 3.04 billion PUMP, with an average price of 0.006 USD. Buybacks can support the price, but it inevitably gives the impression of transferring from one hand to the other. Of course, for holders, regardless of the purpose, as long as it can drive up the price, it is a good thing.

Whether it is to exit liquidity or purely to benefit the community, the valuation controversy of Pump.fun reflects the current state of the market. Once known for its liquidity, MEME is now collectively facing difficulties, and the attention economy, which has attracted much attention, seems to be gradually becoming a false proposition. Nowadays, even the most representative applications are heading down the path of issuing coin, subtly indicating that the narrative is about to come to an end. Where MEME will ultimately go, the PUMP token serves as a weather vane. The market's bets on it will be an effective observation of the value judgment of the attention economy. An increase in token price at least represents market recognition of its pricing; while a decrease in token price will prompt people to think about the true meaning of the MEME market, potentially triggering more selling sentiment. This may also be one of the reasons why Pump.fun has adopted a buyback strategy.

Returning to the question in the title, who has made money from Pump.fun's issuance? There is no doubt that the project party has made money, and participants in both public and private offerings seem to have profited as well, along with short-term investors. But how long can they continue to profit, and to what extent can the project party maintain the coin price, remains a huge unknown. Some large holders have already begun to cash out. According to monitoring, a large holder spent 5 million USDC through 5 wallets to participate in the PUMP public sale, purchasing 1.25 billion PUMP, and sold all of it today at an average price of $0.0067, earning a profit of $3.416 million.

On the other hand, returning to the current situation, the improvement of the macro market will also affect the MEME market to a certain extent. The narrative related to Ethereum is strengthening, and mainstream tokens led by it are continuously rising, directly driving the explosion of high-quality projects in the Ethereum ecosystem. Taking ENS as an example, it has risen more than 18% today, reaching a new high since February this year. In the long run, although the current market has strong uncertainty, foreseeable interest rate cuts are on the way, and the altcoin market may also be expected to welcome a small climax. MEME is more likely to show a trend of polarization, with high-quality MEMEs rising due to sector rotation, while other MEMEs may be neglected due to liquidity being withdrawn.

According to this development path, although the nature of MEME, which is similar to the lipstick economy and lottery economy, will always exist, it will be difficult to stir up a funding storm in the market like in 2024.