Celebrity involvement has also fueled Pump.fun’s rise. Last month, Caitlyn Jenner launched her own token JENNER on the platform, heavily promoting it.
Simplicity often wins the day in the crypto world. Solana-based meme coin launchpad Pump.fun has proven this, crossing the $50 million revenue milestone. According to DefiLlama data, the platform has generated over $598,000 in revenue in the last 24 hours alone.
Launched in January this year, Pump.fun has quickly risen to prominence amid the meme-token craze. Its user-friendly interface and Solana’s low transaction fees have attracted a slew of political-themed cryptocurrencies and celebrity tokens. According to Dune Analytics, over 1.18 million memecoins have been deployed via Pump.fun, although daily fees have recently dipped due to unfavorable market conditions.
Pump.fun’s revenue model is straightforward: a 1% fee on trades and a two SOL fee when tokens reach sufficient liquidity to be listed on Raydium, a decentralized exchange on the Solana blockchain. This model has driven the Solana ecosystem’s substantial user engagement and transaction activity.
Celebrity involvement has also fueled Pump.fun’s rise. Last month, Caitlyn Jenner launched her own token JENNER on the platform, heavily promoting it. JENNER’s value soared to $43.6 million shortly after launch but has since fallen by over 85%.
Pump.fun’s commitment to fair launches is a major selling point. All tokens on the platform are launched without presales or team allocations, a setup designed to prevent rug pulls. This provides traders with a secure and trustworthy environment.
Initially, a meme coin trades exclusively to Pump.fun, with a market cap of $4,000. Once a token’s market capitalization reaches around $60,000, the platform will automatically close trading and will be migrated to Raydium.
Rising Scams
Interestingly, Pump.fun is not without its share of scams. The low cost of releasing tokens on the platform results in a flood of fraudulent activities, with an estimated 95% of tokens launched being scams.
One prevalent scam type is the “Simple Dev Dump. On Pump.fun, the developer’s wallet is visible, making it easy for developers to manipulate the market. In this scam, the developer buys 5-6% of the tokens for the dev wallet and then dumps them before reaching Raydium. This dumping can occur within five minutes or just before the token is listed on Raydium.
Another scam involves dumping when achieving the “King of the Hill” (KOTH) status. As the developer sells off their tokens, panic ensues, leading to a mass sell-off as other traders race to exit first. This turns into a PVP (player versus player) scenario where the goal is to offload the tokens before the price plummets.
Pump.fun’s success has spurred competition. Crypto data aggregator Dexscreener recently launched a rival Solana-based memecoin launchpad named Moonshot, which has already accumulated nearly $500,000 in its debut week.
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