Aperçu du protocole PUMP.FUN : du calcul de la courbe de liaison à la construction de la stratégie de profit

Auteur original : @malloyberac 3

Mentor: @CryptoScott_ETH

introduction

Bitcoin has laid the foundation for the value of cryptocurrency because it cannot be issued in large quantities. Ethereum has triggered an ICO craze through smart contracts, and Inscription and Memecoin have attracted massive amounts of funds due to fair distribution. The replacement of new technologies has continuously expanded the audience of crypto applications; and the differences in the issuance mechanisms of emerging tokens further reflect the changes in the audiences investment value concepts.

Different from the old meme coins such as $DOGE $SHIB $FLOKI that try to combine practical applications, the Memecoin market has shown a new form of business under the leadership of $BOME $SLERF since the beginning of this year. From issuance to trading, around the upstream, midstream and downstream of the Memecoin ecosystem, many innovative applications worthy of attention have emerged in the track.

PUMP.FUN is a decentralized Memecoin issuance platform. Users only need to provide creativity, and they can publish their own Memecoin on the platform with one click at a very low cost (0.02 sol); users can also participate in the tokens issued by others and witness the process of a Memecoin from scratch to a large-scale popularity.

PUMP.FUN is a phenomenal performance application in the track, which has research value and deserves repeated discussion. The PUMP.FUN Dune dashboard can explain the new track business model from the aspects of platform, user, product behavior, activity, growth trend, etc., which is worth tracking for a long time.

1. Introduction to PUMP.FUN

1.1 A comparison

Let’s start with a comparison. In my opinion, PUMP.FUN is different from the FRIEND.TECH has a very similar market performance. It first attracted attention in the Degen player circle on the chain on a small scale. After it went viral, the track and platform data showed a spiral upward trend. Both of them quickly occupied a very high market share as industry pioneers, and the real users and protocol revenue increased day by day. Fud, which is always present in the crypto world, has almost no impact on the ecological status of the two.

From the perspective of product design, the two platforms are similar but still have certain differences. Both asset issuances use the PAMM (Primary Automated Market Makers) mechanism to provide convenience to users, but their assets and specific pricing curves are still different. Taking PUMP.FUN as an example (the same applies to FRIEND.TECH), PAMM is divided into two mechanisms: Fund-to-Mint and Burn-to-Withdraw. The former can deposit the users $SOL into the PAMM smart contract reserve pool, and the smart contract reserve pool will cast an appropriate number of Memecoins based on the current pricing reported by the Bonding Curve and send them to the user; the latter can exit by selling Memecoin to the PAMM smart contract. Unlike Memecoin on PUMP.FUN, FRIEND.TECH tokens have the characteristics of integer Mint and theoretical unlimited issuance (social relationship establishment). In addition, FRIEND.TECH assets are tokens representing users social accounts, while PUMP.FUN is Memecoin issued by users.

The two projects had very different approaches to market entry and subsequent development. FRIEND.TECH is backed by the top crypto agency Paradigm, whose Pointsfi user incentives used by NFT market Blur and Ethereum Layer 2 network Blast in its portfolio were also copied to help FRIEND.TECH retain users. The launch of airdropped tokens and Club Key gameplay in FRIEND.TECH V2 triggered a new round of market speculation. PUMP.FUN followed the tone of Memecoins civilian-oriented and fair launch, and its investment and financing background was difficult to query. Even though it made hundreds of thousands of dollars a day, it did not release any token plans and expanded the platforms functions in a low-key manner. For more in-depth research on FRIEND.TECH, please refer to previous sharing: Friend Tech — Gryphsis Academy Sharing Session

1.2 PUMP.FUN Bonding Curve and Products

Since the project contract is not open source, the product launched by PUMP.FUN only announced the gameplay and charges, and the official did not mention the adopted mechanism and product details. In the research process, it is necessary to build a product model and compare and verify the data. The specific research on PUMP.FUN Bonding Curve is as follows:

(1) Product model building

Compared with other track tokens, Memecoin is designed around community consensus and group trading sentiment. Generally, the total amount of tokens is large and fully circulated, which can be coordinated with different promotional strategies; the initial price will not be set too high, and the early price curve is relatively steep, and the sharp price fluctuations attract capital to enter.

PUMP.FUN Products:

• When a user thinks of a good idea, he first Select the Ticker you want to publish on PUMP.FUN and publish a new Memecoin with one click.

• Other users of the platform continue to buy and sell Memecoin tokens on the pricing curve.

• Afterwards PUMP.FUN sends the newly created Memecoin to Raydium.

• The new Memecoin has further expanded its reach, and users can trade a Memecoin on Raydium. A new Memecoin created by PUMP.FUN users and funded by other PUMP.FUN users, with a total supply of 1 billion and an initial market value of $69k (410 $SOL).

Users only need to think of a Ticker, upload a picture, write an introduction, and easily create a Memecoin for a small fee; other users can comment below, and the message board-like function set up by PUMP.FUN also facilitates the establishment of the Memecoin community; click on the user address, and the platform can display the tokens held/created by the user and the objects followed.

Other users can trade this token, and when the transaction reaches the fundraising limit, the token will be sent to Raydium.

(2) Pricing curve

Unlike FRIEND.TECH, whose pricing system only accepts integer inputs and outputs, the token pricing system on PUMP.FUN is a smooth curve; unlike FRIEND.TECH, whose tokens are theoretically unlimited in issuance, all Memecoins on PUMP.FUN share the same economic model, with a constant total token supply. Users mint some tokens at a reasonable price on the Bonding Curve, and the remaining tokens and raised funds form an LP pool.

After parsing the front-end code, we get a function call named virtualSolReserves. The PUMP.FUN pricing system has a pre-virtual pool, in which the amount of $Sol is x 0 and the total amount of tokens is y 0. By collecting data on the amount of $SOL purchased by platform users and the corresponding tokens, and fitting with the x*y=k formula, we get a pre-virtual pool of 30 $SOL and 1,073,000,191 tokens. The initial k value is 3,219,000,5730, and the price of each token is 0.000000028 $SOL.

The following figure shows the calculation process:

The joint curve pricing function is y= 1073000191 – 32190005730/(30+x), where x is the amount of $SOL purchased and y is the corresponding amount of tokens. The derivative gives the price of each token. The following is the function curve, with the blue one being the pricing curve and the red one being the price curve. The curve shows that it is consistent with the steep characteristics of the newly issued Memecoin in the early stage.

(3) Case comparison analysis

• Users bought and sold to finally raise 85 $SOL, and after replacement, they obtained 800 million Memecoin tokens, which is in line with reality.

• The raised funds of 79 $SOL (6 $SOL as listing fee) and an additional 200 million tokens were added as the initial liquidity trading pool and sent to Raydium. The final total token amount was 1 billion, which was in line with reality.

• The price of each token when Raydium was launched, i.e. the moment the fundraising was completed, was 0.00000041 $SOL, which was 14.64 times higher than the initial virtual pool price, which was in line with the actual situation.

At this point, the product details of PUMP.FUN are clear. Users can spend 0.02 $SOL to publish Memecoin with one click. The initial virtual market value of this Memecoin is 30 $SOL . Other users raise 85 $SOL to obtain 800 million tokens. PUMP.FUN mints 200 million tokens, which are combined to form a trading pair and added to Raydium. Finally, a decentralized Memecoin with a market value of 410 $SOL and a total token volume of 1 billion can be obtained. During the whole process, PUMP.FUN charges 1% of the platform transaction fee before listing on Raydium, as well as a currency listing fee of 6 $SOL during the packaging and listing on Raydium.

2. Why you should pay attention to PUMP.FUN

2.1 Why Pay Attention to Meme

For people outside the crypto world, Bitcoin has no practical use and only exists for speculation. The soaring price only represents the success of the Meme attribute in communication. For the Ethereum ecosystem under the smart contract, $UNI has no empowerment before the voting mechanism. Like Dogecoin, the investment logic is only based on the recognition of industry pioneers and the consensus of the spread of the crypto spirit. Crypto users who have experienced the Meme Season, the Summer of Inscriptions and the Memecoin Pre-sale chain money-making craze have a unique understanding of Memecoin, which has no utility. The lack of mainstream narratives, the mismatch of funds in the time dimension, and the continuous pursuit of fair launch by crypto users who invested in Memecoin have continuously strengthened the reflexivity of the Memecoin market. For more views on Meme, see the official article: Deconstructing Memes, Why Do MEMEs Perform So Well in This Cycle?

Last November, $ORDI was launched on the top exchanges, ushering in the summer of inscriptions. New assets that emerged during the crypto cycle have injected new narratives into the market. Currently, the number of Bitcoin inscriptions has exceeded 66 million, contributing a total of more than $470 million in fees.

The meme coin $GME last received market attention three months ago. The recent activity of the protagonist of the GME incident on social media has brought the stock and related cryptocurrencies back into the public eye. The $GME on the Solana chain has risen by as much as 30 times, and the related concept imitations on PUMP.FUN have exploded, and the popularity has also exploded.

Celebrities choose to issue tokens on PUMP.FUN and collaborate with crypto industry insiders to further break the circle. The token $JENNER released by Caitlyn Jenner of the Kardashian family also brought Drama to the crypto world, completing a 160-fold increase in one night, with a maximum market value of 30 million US dollars.

Why do we pay attention to Meme? To borrow the definition from the article mentioned above, Memes spread through imitation; any information that can be copied through imitation can be called a meme. As humans are essentially repeaters, spreading Memes is a phenomenon and a result, and it is a process of evolving gene collections looking for order in disorder. In addition to the wealth-making effect of the Memecoin track, many crypto assets themselves also have Meme attributes, whether it is Bitcoin, which builds the value foundation of the crypto world, or decentralized tokens issued in combination with smart contracts, or inscription meme coins and celebrity coins launched based on simple logic.

2.2 PUMP.FUN operating data

Memecoins that have passed through PUMP.FUN users and platforms will have a copycat effect after market logic verification, and the trading volume will continue to increase; all information about the tokens will be marked on PUMP.FUN, and the platform will have huge profits in the process of hot events being repeatedly mentioned. After comparing with the verified and constructed Dune dashboard, we believe that the amplified data results can explain most of the phenomena of the new Memecoin business established by PUMP.FUN. The Dune data dashboard includes platform users, platform revenue, token creation status, and high-frequency trading activities, and can analyze the platform, users, and products in terms of behavior, activity, growth trends, etc. Dune dashboard website: PUMP.FUN by Gryphsis Academy

(1) Platform revenue

According to the Dune data dashboard, the PUMP.FUN platform ushered in the first wave of growth in mid-March. As a player who was not the first to occupy the ecological niche in the track, users were gradually accepted during this period. Several Memecoins selected by the platform also created many stories of wealth creation. $SC, which was launched on March 26, reached a market value of over 100 million in a few days. Memecoins created by other users also had different degrees of wealth creation effects because they were in the early stages. The platforms daily income reached 1,000 $SOL, and continued to grow in the future.

PUMP.FUN experienced an explosive growth period from April to early May. $MICHI, which was launched on April 8, exceeded 200 million in market value, igniting the market sentiment. The Memecoin narrative switched rapidly, and imitations emerged in an endless stream, from national coins brought by the Summer Olympics to religious coins, and then to Trump concept coins. There were probably tens of thousands of Memecoins created and traded every day. The platforms daily revenue exceeded 2,000 $SOL on average .

From mid-May to the end of May, when GME stock soared on May 13, the related Memecoins created by users on PUMP.FUN also created a record of revenue for the platform, reaching 1.2 million US dollars . After experiencing the attack of former employees, PUMP.FUN ushered in a further breakthrough after a brief decline in popularity. The popularity brought by the Memecoin created by celebrities raised the platforms revenue to 1 million US dollars again. After breaking the circle, the average daily revenue reached 700,000 US dollars, and the total revenue of the platform reached nearly 37 million US dollars.

On May 16, the wallet account permissions for creating trading pairs on the PUMP.FUN platform were stolen by a former employee, resulting in a large amount of Memecoin being unable to be listed on Raydium after completing fundraising. Users lost up to 2 million US dollars. In order to win back users, PUMP.FUN took measures to reduce platform revenue.

(2) User growth

According to Dune data, the number of PUMP.FUN users has been on the rise so far, with occasional ups and downs, but the popularity brought by users to the platform has never diminished. Before April 16, the number of new users on the platform increased dramatically every day, gathering nearly 35,000 active users within a month. The user habits cultivated by the platforms products gradually laid the foundation for subsequent retention. From late April to May, the number of new users on the platform slowed down every day. After the celebrity effect broke the circle, the number of active users on the platform peaked at 64,378 on May 30. The number of new users per day will continue to slow down in the future, and the platform is likely to usher in the first user growth bottleneck.

(3) Memecoin products

If the Memecoin issued and traded by each user on PUMP.FUN is regarded as a platform product, the data on the platform product can reflect the users behavior and facilitate improvements to corresponding problems.

The number of Memecoins created on PUMP.FUN varies with the number of active users. A total of 862,988 Memecoins have been created since the platform went online, with an average of 15,000 new Memecoins created every day since May.

Only 10,707 of them can be launched to Raydium for wider trading, which shows that the platforms revenue mostly relies on transaction fees, while token creation fees and listing fees account for a smaller proportion.

At present, PUMP.FUN has not disclosed its financing information, and the platform is still in its rising stage. Dune data shows that there are many addresses with high-frequency transactions, and the possibility of brushing cannot be ruled out.

The platform now also has a live broadcast function, which displays the issuance and operation of emerging Memecoin in the form of live broadcast and video, providing a suitable way to break the circle of traffic and funds.

PUMP.FUN also cooperates with @bubblemaps to generate associated bubbles for traders, which can check the association of token holding wallets and whether they will be sniped by Devs burning token wallets, reducing the possibility of Rug Pull. The effect of the platforms new functions still needs to be verified by data, and the constantly changing hype of Memecoin narratives and the launch of new functions also reflect the teams ability to adjust in a timely manner.

In general, the PUMP.FUN platform ignited the market after it went online. Without institutional endorsement, it met the needs of users through the Bonding Curve mechanism, and the platform also relied on the wealth effect brought by the issuance of Memecoin by users to complete the drainage and publicity. The subsequent Meme narrative switched quickly, and the serious user PVP phenomenon did not affect the data growth structurally. Instead, it continued to break the circle due to several hot events. In the future, the platform may face growth bottlenecks due to external competition, but for applications that occupy an advantageous ecological niche, there are only more choices to make.

2.3 Comparison of Competitive Products

Compared with other Memecoin Launchpad competitors, PUMP.FUN is better able to build the underlying value of Memecoin derived from community consensus and group trading sentiment. The Memecoin launched by the platform has an absolute advantage in market performance. As of June 6, the date of completion of this article, there are 16 tokens on PUMP.FUN with a market value of more than 3 million US dollars, and the $SC token has the highest market value of 300 million US dollars.

The reason why PUMP.FUN performs well while other competitors are weak can be attributed to its products and the ecosystem behind it.

(1) Unlike other competing products that give users a peaceful and static feeling, the most intuitive feeling when opening the PUMP.FUN website is the jumping numbers and dynamic pictures. The high-saturation design stimulates the users senses, and the emotions are mobilized as if facing Memecoin transactions. The introduction of the gameplay is only five simple sentences, which is in line with the characteristics of Memecoin transaction users. However, other pages introduce token-related information in great detail, which is convenient for new buyers to quickly form a community consensus. The platforms logo is a small green pill, which seems to be intended to express a healing pill but is addictive, and platform users cannot extricate themselves.

(2) Unlike PUMP.FUN, which is backed by the Solana ecosystem, meme.market / werich_ / rugdotfun / Momentum_v1 all chose to develop on the Base chain, and the funds and attention on the Base chain were diverted to FRIEND.TECH and Farcaster. Memecoin has solved the cold start problem with the help of the Socialfi platform, and the market value of $DEGEN and $FRIEND tokens is large, which can give the two platforms other Memecoin imagination space. In the Memecoin Launchpad track of the Base chain, users have become accustomed to the echo wall built by FRIEND.TECH and Farcaster through the social model, and the funds and traffic have been divided up.

(3) During the period when PUMP.FUN was attacked, DEGEN.FUND was launched on Solana. Similar Bonding Curve and attempts to use cheaper platform fees did not continue to attract the market and form a sufficient scale. The $IYKYK token, which was hyped as a leading target, also returned to normal after a short-term hype by players on the chain.

3. How to participate in PUMP.FUN

For the new sub-segment of Memecoin Launchpad, PUMP.FUN should be the object of investment research and in-depth participation. We divide the users of the platform into three roles, namely Memecoin Creator, Memecoin Trader, and Memecoin Opportunist . The roles can be fluid, and users will have different opportunities to choose from when facing the same Memecoin in the process of switching roles.

3.1 Memecoin Creator

Memecoin Creator can be a crypto artist, an early evangelist of Memecoin narrative, or a project owner who uses the platform for publicity. Now that they have broken through the circle, they can even be celebrities from all walks of life. As roles that need to publish/discover new Memecoins worth trading, they need to master certain communication knowledge and have a certain influence. A good Memecoin Dev can cooperate with social media to screen out strong Tickers for the market. A Dev who is not very sensitive to the market can also reduce the cost of trial and error with the help of PUMP.FUN. And if you have a special identity like Caitlyn Jenner and Iggy Azalea, the decentralized distribution platform PUMP.FUN can help you save the middle link and bring enough funds and traffic support for your tokens in a very short time.

After screening out good Tickers, Crypto Native crypto artists and Memecoin enthusiasts can use PUMP.FUN to reduce the cost of token issuance.

Early discoverers use their knowledge and influence to form a new Memecoin narrative for a specific Memecoin platform, and the community established under the narrative has the opportunity to further break out of the circle.

Celebrities issue tokens on PUMP.FUN, and cross-circle interactions and crypto users participate in the Memecoin craze. The last crypto concept that broke the circle was NFT assets. Compared with FRIEND.TECH, celebrity tokens and NFT assets can be used as one of the products of celebrity IP; the tokenization of social relationships will not attract people with certain influence, because their public social resources are very rich, and private social relationships meet their own needs.

3.2 Memecoin Trader

Memecoin Trader is the most active player on the chain recently. While tracking wallets, using tools, and paying attention to social media, he needs to build his own trading strategy to make a profit in the high-risk and high-return game. Compared with other risky assets, traders profits on Memecoin are more unstable, the winning rate is generally not high, and the trading rhythm is getting faster and faster due to the characteristics of the platform, which indirectly increases the probability of losses.

The experience of being a Memecoin Trader on PUMP.FUN made me realize that in addition to the need for a constantly improving trading system, the power of the team is very important. Even when facing huge opportunities, players on the chain need the cooperation of community members, and the community tacit understanding formed by transactions can eventually return to the consensus of the transaction target. The following is @0x SunNFT and community members reviewing the process of celebrity Iggy Azalea issuing the token $MOTHER.

3.3 Memecoin Opportunist

Whether it is the arbitrage target of scientists on the chain or the high-frequency behavior robots looking for Alpha opportunities, compared with the previous two platform roles, Memecoin Opportunist is the object that smart wallets should focus on. And how to choose the right strategy to become a Memecoin Opportunist in PUMP.FUN is worth pondering. Using the analogy of Texas Holdem, when the table is hot, you should enter the pot. You can choose a sniper robot strategy to grab the opening when the market is good and the liquidity is sufficient to increase participation and amplify profits; when the table is not so hot or the market is relatively bottom or stable, you can choose a reverse sniper strategy to generate income while maintaining sensitivity to the market.

(1) Memecoin Opportunist Sniper Strategy

Every time a new Memecoin is launched on PUMP.FUN, the snipe bot will complete the first few buy transactions within a few seconds after screening by indicators. Because the entry position is low enough, the early pricing curve is relatively steep, and the overall market heat of Memecoin continues, this strategy has been able to capture several targets with huge gains in the past few months.

From left to right, $DONALDCAT has a maximum market value of 15 million US dollars, $JAPAN has a maximum market value of 5 million US dollars, and $NIGI has a maximum market value of 12 million US dollars.

The strategy of sniping robots to grab the opening needs to be sensitive enough to the market sentiment. Unlike the Solana Sniper Bot that ordinary users may use, there is no contract available for sniping in PUMP.FUN. Instead, the behavior of sniping coins is targeted. It requires clear monitoring of the interaction between users and the platform on the Solana chain, and the ability to isolate the tokens issued by Dev with Rug behavior; after the sniping is completed, set the parameters that can adjust the stop loss or take profit in time, and backtest the data to adjust the sniping funds.

(2) Memecoin Opportunist Anti-Sniping Strategy

The strategy of sniping robots to grab the opening of the market is more dependent on the overall market conditions. The model of casting a wide net has more opportunities and also requires funds. Competitors with the same strategy will continue to emerge, further compressing the profit space. In the process of mutual competition, the number of Memecoins that can be run out will gradually decrease. The emergence of the Memecoin Opportunist anti-sniping strategy is to respond to this market change. The specific implementation is as follows:

• Regularly summarize market hot spots and establish a coin issuance material library

• Snipe bots sniping behavior test, sort out the bots strategy (ticker, amount, time…)

• Automate the coin issuance process and build an anti-sniping process

• Adjust parameters to improve capital utilization

Reverse sniping takes advantage of the low-cost coin issuance feature of PUMP.FUN. In the actual process, the reverse sniping strategy with adjusted parameters can bring a single profit ranging from 2% to 20% in a very short time.

The construction of parameters requires analysis of the behavior of the sniper bot address. The short-term hot imitation disks in the market will continuously trigger the signal of the strategy. Being able to automate the entire process of the anti-sniper strategy is the key to improving the efficiency of capital use and expanding profits. The reverse sniper strategy can achieve low-risk arbitrage while screening out good Memecoin narratives at a low cost and also win potential airdrops in the future.

The BSC chain has completed the initial layout of the Meme track by attracting traffic and funds through the Meme-Innovation-Program event; the Base chain is currently also launching the Base Onchain Summer event under the leadership of the founder, and Bases Memecoin will definitely receive traffic tilt. The public chain has laid out Memecoin and related tracks by organizing Campaigns, while PUMP.FUN, as a unicorn application in the emerging track, is currently only running on Solana. While believing in the PUMP.FUN team and products, the track participation strategy should also consider the hot cycle. In the authors opinion, the way institutions enter the market is almost certain now. Whether it is a strong acquisition at a low point or participating in the construction as an investor, the leader of the track will return to its due value in both the primary and secondary markets. Therefore, the author believes that the Memecoin Opportunist anti-sniping strategy is the best way to lay out the entire track in advance through PUMP.FUN.

4. Conclusion

From Ethereum to Solana, from Shiba Inu to Frog, from crypto enthusiasts to celebrity effects, people’s pursuit of traffic hotspots never stops. From sloths burning pools to PUMP.FUN’s innovation in issuing transactions, people are constantly exploring Memecoin’s decentralized and fair mechanisms. As the leader of the emerging track, PUMP.FUN’s extremely low-cost issuance model has completely changed the ecology of Memecoin. The application ecology it has built meets the needs of users and is a unicorn project in the crypto field. As the most Crypto Native narrative application, it has not even released its own platform tokens. What kind of economic flywheel can be formed in the end requires continuous exploration by track pioneers.

According to Deflama, the monthly revenue of PUMP.FUN protocol as the Memecoin issuing platform on Solana exceeds Uniswap Labs, becoming the fourth largest protocol in all blockchain networks. In the face of this unicorn application with no additional information disclosure, we need to figure out what it is. Some people think it is a large casino, and some people think it is another platform for PVP in the crypto world with depleted liquidity. The author believes that in addition to the above characteristics, it should be a revolutionary product of new crypto assets, which embodies the spirit of decentralization to the extreme in a very low-cost way. Just as Bitcoin rewards early miners and evangelists, why cant Memecoin, which is built on community consensus and trading sentiment, reward users who discover its value through the game process? Is it just because Bitcoin consumes electricity, and PUMP.FUN consumes brainpower and physical strength?

“Before learning to construct, don’t take the deconstructed things as the final answer to the problem.” Facing the surging Memecoin reform wave in the encrypted MATRIX world, the author will take the green pill of PUMP.FUN with a peaceful mind.

references:

[1] https://foresightnews.pro/article/detail/59863

[2] https://messari.io/report/analyst-discussion-pump-fun

[3] https://www.theblockbeats.info/news/53703

[4] https://x.com/lukema95/status/1788858814420382121?t=A2CvlJFGTTlxko7Ymtpojws=05

[ 5 ] https://mp.weixin.qq.com/s/ JwqVcjY 0 ENUFFk 9 oI 79 VfQ

[6] https://www.youtube.com/watch?v=losZU4qcs-Mt=4s

This article is sourced from the internet: PUMP.FUN Protocol Insights: From Bonding Curve Calculation to Profit Strategy Construction