Pump.funs analysis of the pros and cons of Solana ecosystem: poison or antidote?

Original｜Odaily Planet Daily ( @OdailyChina )

Author: Wenser ( @wenser2010 )

On July 24, Solana Ecosystem Meme Coin issuance platform pump.fun’s cumulative revenue exceeded the 70 million US dollar mark , becoming a phenomenal product in this cycle. What followed was a discussion about whether pump.fun’s impact on Solana’s ecology was good or bad. Supporters believe that Solana’s ecology ushered in the Meme coin boom through pump.fun, attracting funds, traffic and developers; opponents believe that pump.fun brought more Rug scams, network congestion and junk Meme coins to Solana’s ecology. Odaily Planet Daily will briefly analyze this in this article, so that readers can look at this matter from a more comprehensive perspective.

pump.fun: A product of the times that create heroes

At the beginning of May, the Solana ecosystem issued a record high of 14,648 SPL tokens. The main driving force behind this achievement came from pump.fun, which accounted for more than 50% of the newly issued tokens. At that time, pump.fun was more regarded as a one-click coin issuance platform and there were relatively few Golden Dog Meme Coins, but it had attracted a lot of market attention. Nan Zhi, a senior writer of Odaily Planet Daily, also gave a complete introduction to this. For details, please see the article The driving force behind the continued record-breaking growth of Solana tokens, interpreting the growth engine Pump.fun .

Looking back at the development history of pump.fun, the important milestones include the following:

• The Solana ecosystem Meme coin craze led by BOME and SLERF in mid-March truly injected new liquidity and market attention into it, and also laid the groundwork for the explosive growth of subsequent Meme coin projects.

• In May, pump.fun suffered a flash loan attack and $1.2 million was stolen. It was later found that it was done by a former employee (for details, please refer to the article Former employee retained privileges to steal $1.2 million, how outrageous is the pump.fun theft? by Fu He, a senior writer of Odaily Planet Daily). Although it once faced a crisis of trust, the project still overcame this difficulty by properly handling it. Later, it also launched a live broadcast function, opening the Meme Coin New Media Era. Recently, the Recommended for you information flow function has also been launched on the platform.

• By the beginning of July, the number of tokens issued on Pump.fun had exceeded 1.17 million, with cumulative revenue exceeding US$50 million; and on July 1, it achieved a new achievement of US$1.99 million in revenue in the past 24 hours, surpassing blockchain networks such as Ethereum, Tron, and Solana, and ranked first in DefiLlama protocol revenue.

Thanks to the Meme coin project that is active every moment on the pump.fun platform, the Solana ecosystem has become the only light in the volatile market in recent months.

• On June 24, according to data disclosed by SolanaFloor, the total transaction volume of DEX on the Solana chain exceeded 400 billion US dollars, the total number of trading users exceeded 20 million, and the Swap transaction volume was approximately 1.59 billion.

• On July 22, DeFiLlama data showed that the transaction volume of Solanas on-chain DEX in the past 7 days was US$14.597 billion, ranking first for three consecutive weeks, with a 7-day increase of 9.73%.

• On July 24, according to Ryan Connor, a researcher at Blockworks Research, Solana surpassed Ethereum for the first time in terms of decentralized exchange (DEX) trading volume in the past 30 days. By this metric, Solana has become the most used chain.

It can be said that the results at the data level are far from fully reflecting the value of pump.fun in terms of liquidity, attention, and influence that it brings to the Solana ecosystem. In a sense, pump.fun has become the engine supporting Solanas ecological bull market.

But behind the prosperity, pump.fun has penetrated into every aspect of the Solana ecosystem like a poison.

pump.fun: The culprit for the rapid decline of the ecosystem

As the saying goes: What makes you, can also limit you. The role of pump.fun in promoting the Solana ecosystem is obvious to all, but there are also many negative impacts. Specifically, the main negative impacts include the following:

Rug disks are rampant and there are countless scams

According to Dune statistics , there are nearly 1.5 million Meme coin projects issued by the pump.fun platform. Among such a large number of projects, there are still many levels to be broken through:

Only when the project meets the market value of $69,000, the platform will add $12,000 of liquidity to Raydium (Solanas top DEX) and destroy LP; after that, the market value of 100,000, 200,000, 500,000, 1 million, and even 10 million, for these Meme coin projects, each level is a threshold, and the slightest carelessness will lead to a direct return to zero. Only a handful of projects, such as BILLY (emoji puppy), can achieve such an achievement of breaking through the market value of $100 million. Naturally, the ultra-low threshold for issuing coins has also created countless Rug scams.

pump.fun related data

Celebrity Coin Vanity Fair, pump.fun becomes a new platform for harvesting

According to the statistics of crypto KOL Slorg , the market value of more than 30 celebrity concept meme coins with a certain degree of attention in the market has dropped by at least 80% in just a few days to dozens of days. Pump.fun provides the most convenient tools for these celebrity coins, and to some extent becomes an accomplice in the harvesting of celebrity coins.

Slorgs statistics on the market value performance of celebrity coins

Attracting attention and showing ones inferiority may lead to serious and extreme incidents

Previously, after pump.fun launched the live broadcast function, it attracted great attention from the market. Prior to that, a developer named Mikol launched a Meme coin called TruthOrDare (DARE) on Pump.fun in May and was sent to the hospital with third-degree burns all over his body due to accidental ignition of alcohol in the subsequent Twich live broadcast. Previously, a Meme coin project called LIVEWITHMOM had broadcast live footage of a minor and his mother based on the rise and fall of the coin price and the requirements of the barrage, and involved footage of some private parts of the naked body. It has to be said that once a Meme coin project goes crazy, it is easy to cause a series of out-of-control incidents.

LIVEMOM project live screen

In addition, pump.fun has caused the Solana ecosystem Meme coin projects to become more and more PVP. A project can return to zero in just a dozen minutes or a few minutes. The existence of MEV clamps and various sniper robots has also caused the Solana ecosystem to fall into a drinking poison to quench thirst trend and cannot extricate itself. In the long run, the attention and liquidity of serious projects will also decline.

Summary: pump.fun will continue to exist as a “casino”, but the platform determines its life cycle.

In general, pump.fun has more advantages than disadvantages for the Solana ecosystem. As mentioned in the previous article One-click coin issuance has become the new password for encryption, which platform can compete after pump.fun? , the one-click coin issuance platform has become an important tool to promote the development of the ecosystem, and many similar projects are also competing to seek their own ecological position in different blockchain networks.

Therefore, as VC coins are becoming increasingly unpopular and BTC spot ETFs and ETH spot ETFs are listed one after another, pump.fun will continue to exist in the form of an on-chain casino and attract more people to rush in because of its greater liquidity and high attention.

However, if the platform fails to respond by seeking reasonable methods to limit Rug trading, scams, and avoid extreme events, it may one day face a traffic backlash and be ruthlessly abandoned by the ecosystem and the market. This may also be one of the reasons why Solana officials have recently promoted features such as Blinks.

As for now, we can only say that liquidity is the most honest manifestation.

This article is sourced from the internet: Pump.funs analysis of the pros and cons of Solana ecosystem: poison or antidote?

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