Recently, although tens of thousands of tokens continue to surge daily on the Solana chain, it has been a long time since the last "everyone chasing dogs" phenomenon, and the market has entered a state of high frequency but lack of strength. In this context, the hot infrastructure Pump.fun has been reported to be raising $1 billion with a $4 billion FDV, officially issuing its platform token $PUMP.
The market has reacted differently to this news. On one hand, Pump.fun has demonstrated strong user engagement and revenue capability on the Solana chain over the past year, achieving daily revenues exceeding $10 million at its peak, supporting its high valuation logic. On the other hand, many voices question the sustainability of its profitability, whether the platform token has a reasonable value capture mechanism, and its negative impact on Solana's liquidity.
More critically, this valuation level is approaching that of compliant crypto infrastructure companies like Circle, which have clear advantages in business stability and regulatory compliance. Additionally, Pump.fun's revenue is highly dependent on market sentiment, leading to significant income volatility, which challenges the long-term validity of its valuation.
This article compiles various industry observers' differing views on this event, covering multiple dimensions such as project valuation structure, user incentive design, and ecological impact assessment, attempting to provide readers with a more complete discussion. Whether this is the final sprint under the tide of liquidity withdrawal or a key battle in platform transformation may still require time to verify.
Related reading: "With a $4 billion valuation and token issuance, is Pump.fun a market savior or a liquidity killer?"
Pumpfun is an ecological predator and does not deserve support
The Pumpfun team made $10 million from fees, and all the profits went into their own pockets. Launchcoin also made $10 million in fees but only took 20% of it.
Pumpfun has backstabbed Raydium—a veteran protocol that supported it from the early days. It launched its own Pumpswap on Raydium but now eats into Raydium's market. In contrast, Launchcoin chose to collaborate with Solana's top LP service platform Meteora (Jupiter ecosystem).
Pumpfun is backstabbing everyone and every protocol on Solana while also being one of the largest sources of selling pressure on Solana. Raydium at least uses fees to buy back its platform token, while Pumpfun does nothing. Pumpfun is not good for the entire ecosystem. Its founder is not here to help Solana but to plunder.
In comparison, the Believe app is at least "relatively better among two bad options." Pasternak is at least willing to win together with existing projects and takes less. Pumpfun does not see users as people but as ATMs. If it continues to exploit the ecosystem and suck blood from other applications, Solana will ultimately decline along with its users. It is time to stop supporting applications that never give back to users.
Overvaluation and lack of transparency
Will token holders of Pump.fun be able to receive fee dividends in the future? Or will there be an internal token buyback mechanism? If not, I really don't see what value there is in buying this token at a $4 billion valuation.
Even more absurdly, the total market cap of all meme coins issued on Pump is only $500 million more than the amount they are raising this time. Early investors have made out like bandits. As I recall, the valuations for previous funding rounds were $12 million, $100 million, and $250 million.
This means that the earliest round has achieved a paper return of 333 times! Yet loyal users currently have no information about any airdrops—my questions now outnumber the answers.
A test of Solana's liquidity
The first round of seed financing for PumpFun was valued at $12 million. This means that seed round investors have already achieved a paper profit of 322 times on $PUMP in this round, and if estimated by TGE (Token Generation Event), it may have increased by 1000 times.
This industry is simply insane. But unfortunately, I don't see a scenario where PUMP can attract a large number of buyers—because almost everyone on Solana has gone bankrupt due to PumpFun. If I were @a1lon9, I would likely do the same. They indeed need this $1 billion in financing to compete with platforms like Kick and Twitch.
I might choose to airdrop a large number of tokens back to community users—after all, everyone is already addicted to gambling, and the liquidity obtained will eventually flow back to the casino (PumpFun). It is interesting to see how large this on-chain "stimulus plan" will be. Will it drain on-chain liquidity or increase it? To be honest, I tend to think it will drain liquidity—this seems contrary to the mainstream view on crypto Twitter (CT).
I prefer to see this as a transfer of wealth—from the richer people through PF's liquidity pool (funded by VCs) to the airdrop recipients. At the same time, perpetual contract funds will also push up spot prices, indirectly becoming exit liquidity for airdrop users.
Overall, I believe the launch of this token is more beneficial than harmful to the on-chain ecosystem.
Valuation may be reasonable, but the financing method is concerning
Some detailed views on Pump.fun's token issuance (the following opinions are based on the premise that the information circulating on Twitter is true):
A $4 billion valuation may be reasonable, but the scale of financing is simply too large. They need to raise $800 million just from retail investors, which is likely to suppress buying demand at TGE (Token Launch), thus limiting the price increase potential.
Such a fundraising scale is essentially an "extractive" behavior.
Yes, it will indeed cause some liquidity drain in the market, but the impact is mainly concentrated on SOL and the Solana ecosystem. You can assess whether your token holders might liquidate their holdings to gamble on PUMP; for example, hardcore users of HYPE are unlikely to do so, but holders of Solana ecosystem projects might. Ultimately, those fundamentally strong coins, even if they experience short-term liquidity drain, will rebound.
The airdrop ratio is only 10%, which seems too small. A more appropriate range should be 15%-20%.
I would be surprised if this token's FDV (Fully Diluted Valuation) falls below $3 billion for an extended period. Although the growth rate of platform revenue has indeed slowed, pump.fun is still the leading meme coin issuance platform and has a very high user mindshare.
The mcap/fdv (market cap to fully diluted valuation ratio) will greatly depend on the control over its token supply—or whether there is essentially no control at all.
Allocating 25% of platform revenue to token value return is actually on the low side (especially compared to Hyperliquid's 97% buyback). While I don't expect them to reach HL's level, a 50% ratio might be more appropriate.
Overall, I don't think a $4 billion valuation is a disaster (it could even be "fraudulently" inflated to $6-8 billion in the short term), but their current financing method and scale worry me: by the time TGE actually goes live, there may be no new buyers in the market, while a large number of investors holding 25% of the total supply will be waiting to dump.
Poor timing choice
Some unfiltered thoughts and opinions on the Pump.fun token:
Regarding Pump itself:
I personally feel that the timing of the token issuance is a bit late; the platform's fee income has already clearly slowed down, which will have a negative impact on market sentiment and external perception.
They have already made $738 million in fees… If a portion of that is not returned to the ecosystem as incentives, I really don't know what to say (on the surface, this almost contradicts the philosophy of $HYPE—but until more details about the token economy are released, let's give them some space for trust).
They don't need to raise $1 billion anymore (they already have over $700 million on hand!)… This is completely "killing a chicken with a cannon," clearly an opportunistic behavior to take advantage of the situation.
Regarding potential chain reactions:
There may be some negative impact on $SOL in the short term, as some funds will shift from SOL to $PUMP. Many people previously bought SOL essentially to bet on the growth of fee-related revenues from the Pump.fun platform.
However, this fund rotation may evolve into a typical "buy the expectation, sell the fact" market, meaning that the downward pressure on SOL has likely already been priced in by the market before the news officially lands.
This could lead to a continued weakening of the SOL/ETH exchange rate (even though it is already near support levels) and trigger some funds to rotate into other L1 chains in advance.
From a macro perspective, this fund rotation may not be a bad thing: I have personally made a lot in the Solana ecosystem, but I have always believed that the rise of the ETH ecosystem has a healthier "wealth effect" on the entire market. In contrast, Solana has always been too PvP (player versus player) and high-frequency rotation.
I am not pessimistic about SOL's long-term performance; its ecological stickiness and user mindset are already strong, but in the short term, we do need to be cautious of the impacts brought by this volatility. If there is a significant pullback in the coming months, it may actually present a good opportunity to increase positions.
Behind it may be the ambition to build a closed loop of crypto social
I do not believe that Pumpfun's token issuance will lead to the "death" of Solana as some people say. After all, this token is still deployed on the Solana chain, and ecological activities remain on Solana.
Early investors have made a fortune, and I bet they have already brought in a lot of top VC funding. If a large number of retail investors FOMO in during the public sale phase, it may trigger significant selling pressure. After all, buying at a $4 billion valuation presents potential returns that are far less than the risks ordinary users face—it easily becomes "exit liquidity" for early private round investors.
Given their current revenue levels, they actually do not need to raise more funds—unless there is a grander vision behind it. They are also aware that this "casino model" is unsustainable. It is highly predatory, with insiders, packagers, and snipers all profiting. The premise for this system to operate is that there are enough "suckers" coming in daily to keep sending money, but this is destined not to last.
I believe the reason they are raising funds is likely to build a truly "crypto-native" social + live streaming platform. In the future, you won't need to go to YouTube, Twitch, TikTok, X, or Reddit to watch crypto content or participate in discussions—you will only need to go to Pumpfun. A closed-loop ecosystem, an attention funnel, all revolving around $PUMP, with revenue sources coming from its token issuance platform and AMM.
However, challenging these social giants is extremely difficult, which is also why they need significant funding. One major use of $PUMP is likely to incentivize content creators and users—earning income from posts, receiving returns from live streams, and distributing tokens through driving interaction.
However, I guess those early users who are looking forward to Pumpfun airdrops may ultimately be disappointed.
If they really succeed, it is highly likely that they are aiming for an IPO.
Issuing tokens is a carefully designed scheme to harvest profits
Why do you think Pump Fun is issuing tokens? It is well known that @a1lon9 and their team are a CS group, and is the token issuance meant to help everyone get rich? It is highly likely that it is to ultimately extract market liquidity.
It is well known that the biggest tumor in this cycle, especially on @solana, is the @pumpdotfun team, which has sold all the money they earned for USDC. If you say @a1lon9 is issuing $pump to help everyone make money, I don't believe it. So it is to "make one last profit."
Why didn't they issue it in January? The earliest rumors of token issuance were in January, and it was supposed to be a public offering in cooperation with CEX, but then $Trump came, and the market's liquidity was directly drained.
Then @a1lon9 directly said there was no plan to issue tokens. Was there really no plan? They originally wanted to drain liquidity but found that the Supreme Leader had drained it instead, so they could only wait for the next liquidity drought.
Why issue it at this time? Mainly because there are too many launch platforms on @solana, all trying to encircle it, especially since @SolanaFndn also dislikes pumpfun.
Look at @bonkfun + @believeapp + @boopdotfun + @buidldao and other launch platforms. Although @pumpdotfun still ranks first in terms of launch volume, there is still some concern about being surpassed. Additionally, the recent market conditions have been quite good, especially with @ethereum driving altcoins up, which may have led @a1lon9 to feel that missing this wave of token issuance would make them the next @opensea. Do you remember how high @opensea's valuation was during 2020-2021? Now, does anyone still pay attention to it? In 2024, it is estimated to be worth $1.4 billion, but it is likely gone by now.
Perhaps @a1lon9 also thought of this, so they need to issue the tokens quickly to cash out, providing an explanation to all shareholders and themselves, as missing this opportunity may never come again. A big cash-out, completely Fair Launch.
Currently, there are two external narratives: one is to raise $1 billion at a $4 billion valuation and then have full circulation; the other is to raise $1 billion at a $5 billion valuation and then have full circulation. The cheapest investor around is @BiliSquare, a friend of a friend who invested $30 million, followed by @hebi555's $200 million and $800 million, seemingly all in full circulation. It is highly likely that everyone participating will be based on the last round's valuation release, then TGE 100%, with everyone buying in and waiting for a double?
Possible strategy? It is estimated that they will eventually say that token holders will have the right to dividends, after all, under the current situation, @pumpdotfun can earn eight years' worth of money in one go after issuing tokens, and they won't care about the $700 million income for a year. It's just "willing to take the bait," anyway, even if they issue $10 billion, there will be buyers, as it is essentially a "huge casino."
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