Fair narrative will run through the entire bull market, and Meme has become the ultimate weapon for the growth of public chains.

Author: Nan Zhi, Odaily Star Daily

In April, the market experienced a significant pullback, but the Solana market became increasingly hot. On May 4th, the newly issued SPL tokens reached a historic high of 14,648. More than half of the newly issued tokens came from pump.fun. Odaily Star Daily will interpret the platform's functionality, data, and this phenomenon.

Introduction to Pump.fun

Pump.fun was launched in February 2024 as a one-click issuance platform for Meme tokens. When it was launched in February, it did not attract much attention or usage from users, but the number of users and usage began to soar in mid-March.

Operating Process

• Token creation: The issuer only needs to enter the token's name, description, and image, and pay approximately 0.02 SOL to start the "fundraising" issuance process for a token.
• Intra-disc fundraising: For users, choosing the token they want to participate in, then entering the quantity of tokens they want to purchase is equivalent to participating in the token issuance fundraising and being able to sell the corresponding shares before the issuance. Pump.fun will charge a 1% fee.
• Price curve: It is important to note that the token's price before the official launch on Pump.fun is not evenly distributed, but is calculated based on the Bonding curve. Simply put, the token price will rise as the fundraising progresses and fall as the intra-disc sales decrease.
• Token issuance: When a user purchases enough tokens and the market value reaches $69,000, Pump.fun will add $12,000 in liquidity to Raydium (Solana's leading DEX) and destroy LP.

How Pump.fun Stands Out

As of May 5th, Pump.fun has issued 418,936 tokens and accumulated $6.9 million in revenue. From April 1st to May 1st, Pump.fun's revenue reached $4.99 million, equivalent to an annualized income of about $60 million, and the growth trend has not shown any signs of decline. So how did Pump.fun achieve this?

Continuation of 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 emergence of issues such as insider trading, RUG, and scientist front-running, users' enthusiasm for Meme tokens has been severely dampened. As a result, a series of launch platforms such as Pinksale have emerged.

On Solana, there were many Rug tokens in 2023 and earlier, and to avoid excessive losses due to Rug, many users became "10U war gods" by participating in trades with very small amounts, hindering the development of various ecosystems.

The automatic addition and destruction of LP by Pump align with the fundamental needs of users. Tokens from Pump do not have nominal project parties and managers, so there is no issue of Rug due to super permissions.

Meme and Social Attributes

In addition to the token's name, Pump.fun's tokens also need to be accompanied by images and descriptions, and have comment functionality, giving them the ability to quickly and intuitively spread their underlying stories and styles.

Previously, most Meme tokens, project websites, and official media needed to link information through mutual references. In Pump.fun, this is equivalent to completing a one-click aggregation. On the one hand, users can quickly obtain most of the information, and on the other hand, it gives the tokens themselves social and effective dissemination capabilities.

A New Way to "Harvest"?

Although born out of the pursuit of "fairness," some mechanisms of Pump.fun have become a harvesting tool for some users. As mentioned earlier, Pump.fun issues tokens very quickly, so the number of new tokens added daily is very high. Most users can only judge the quality of projects based on their "social" attributes.

On the other hand, the prices on Pump.fun are not evenly distributed. The cost for users who enter later is usually more than five times that of the earliest users. Therefore, some malicious users purchase large amounts of chips at the bottom by creating a false impression of high followers X accounts, wait for users to be blinded by the false impression of high attention and enter, and then quickly exit before the token issuance. Similarly, some influencers create new tokens through their own influence and then use extreme price curves to quickly monetize (harvest) their influence.

Conclusion

Since the introduction of BRC-20, the clamor for fairness and opposition to high FDV VC tokens has been growing. The momentum of PEPE and WIF rushing into the top ten is the primary representative of this trend, and Pump.fun also adheres to this story. It is not difficult to foresee 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 for the Solana ecosystem, not only in terms of an annual income of $60 million, but also in terms of tens of billions or even hundreds of billions of dollars in trading volume behind the $60 million, which is a considerable growth for DEX and nodes, and is the ultimate weapon for Solana to attract users.

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