Solana is the driving force behind the growth of tokens reaching record highs. Interpretation of the growth engine Pump.fun

In April, the market experienced a sharp correction, but the Solana market became increasingly popular. On May 4, the number of newly issued SPL tokens reached a record high of 14,648. More than half of the newly issued tokens come from pump.fun. Odaily Planet Daily will explain the platform’s functions, data and this phenomenon.

Introduction to Pump.fun

Pump.fun was launched in February 2024 as a one-click issuance platform for Meme tokens. Not many users paid attention to it and used it. By mid-March, the number of users and usage began to soar.

Run the process

• Create tokens: The issuer only needs to enter the name of the token, token description and picture , and pay about 0.02 SOL, you can start the "fundraising" issuance process of a token.

• Intra-day fundraising: For users, selecting the tokens they want to participate in and then entering the number of tokens they want to purchase is equivalent to participating in the token issuance fundraising. And if you can sell the corresponding shares before the issuance, Pump.fun will charge a 1% fee.

• Price curve: However, it should be noted that the price of Pump.fun’s tokens before the official launch is not evenly distributed, but is calculated based on the Bonding curve. A simple understanding is that the token price will rise as fundraising proceeds and fall as intraday sales occur.

• Token issue: When users purchase enough tokens and the market value reaches $69,000, Pump.fun will add $12,000 of liquidity into Raydium (Solana head DEX) and destroy the LP.

Why Pump.fun stands out

As of May 5, the number of tokens issued by Pump.fun has reached 418,936. Cumulative revenue was $6.9 million. From April 1st to May 1st, Pump.fun’s revenue reached US$4.99 million, equivalent to an annualized revenue of approximately US$60 million, and the growth trend shows no signs of declining. So how did Pump.fun achieve this achievement?

The continuation of the fair narrative

The answer still lies in the narrative of "fairness". Since the rise of Meme tokens in 2021, they have flourished on Ethereum and BSC. However, with the rat warehouse , RUG, scientist front-running and other problems, users’ enthusiasm for Meme has been severely affected, so a series of launch platforms such as Pinksale also emerged as the times require.

On Solana, in fact, 23 years and earlier were filled with Rug tokens. In order to avoid excessive losses due to Rug, many users became "10U Gods of War" and only participated in transactions with a very small amount, which hindered The development of various ecologies.

Pump’s automatic addition of LP and destruction function is in line with the fundamental needs of users. The tokens from Pump have no nominal project party or manager, so there will be no problem of super-privilege Rug. .

Meme and social attributes

In addition to the name of the token itself, Pump.fun’s tokens also need to be accompanied by pictures and introductions, and have comment functions, which gives them rapid and intuitive dissemination. The ability to have a story and style behind it.

Previously, Meme tokens, project websites, and official media mostly needed to link information through mutual references. However, Pump.fun is equivalent to completing one-click aggregation. On the one hand, users can quickly obtain most of the information; The token itself gives the ability to socialize and effectively communicate.

New way to "harvest"?

Although it was created for the pursuit of "fairness", some of Pump.fun's mechanisms have still become a harvesting tool for some users. As mentioned earlier, Pump.fun issues coins very quickly, so the number of new coins added every day is extremely large. Most users can only judge the quality of the project based on its "social" attributes.

On the other hand, the price of Pump.fun is not evenly distributed. The cost of the last user to enter is usually more than five times higher than that of the earliest user. Therefore, some malicious users have purchased X accounts with high number of fans to fabricate high attention. The user buys a large amount of chips at the bottom, and after the user is deceived by the high-profile false image to enter, he quickly exits before the currency is issued. Similarly, there are also some big Vs who create new tokens through their own influence, and then use extreme price curves to quickly realize (harvest) their influence.

Conclusion

Since BRC-20, the pursuit of fairness and the opposition to high FDV VC tokens have become more and more intense. The momentum of PEPE and WIF sprinting into the top ten is also the primary representative of this trend. Pump.fun was also born based on this story. It is not difficult to predict that the word fairness will run through this bull market and become the starting point for many disruptive projects.

On the other hand, Pump.fun is also of great significance to the Solana ecosystem, not only in its annual revenue of 60 million US dollars, but also in the transaction volume of billions or even tens of billions of dollars behind the 60 million US dollars. There is considerable growth for DEX and nodes, and it is the ultimate tool for Solana to introduce users.

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