Pump.fun, a decentralized finance (DeFi) protocol built on the Solana blockchain, has become the fastest-growing crypto platform in history. Let’s take a look at what makes Pump.fun so successful.
With $100 million in revenue generated in 7 months, Pump.fun breaks a new record
In just over 7 months of existence, Pump.fun has surpassed the symbolic threshold of 100 million dollars in revenue. Thus, the decentralized finance (DeFi) protocol has become the fastest growing crypto platform in historybeating the record set by Ethena by 34 days.
Pump.fun, arriving on the crypto market at the end of January 2024, allows anyone to design their own memecoin for as little as $2.
👉 To go further – What is a memecoin crypto and should you buy one?
So the whole concept of this project lies on the creation of humorous cryptocurrenciesleaving their creator hoping that other users will acquire tokens so that its price will soar and it will “pump”. And that's part of what makes Pump.fun so successful..
Thus, memecoins named Jeo Boden (BODEN), Doland Tremp (TREMP) or Joram Poowel (POOWEL) emerge from the platform, but may also disappear overnight.
In just one month, between April and May, 500,000 memecoins have been created on the platform. The craze around the protocol has even attracted decentralized exchanges (DEX) who have integrated Pump.fun into their applications in order to ride on its successIn this scenario, the protocol charges fees to DEXs, which allows it to fund itself.
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Is the DeFi protocol about to run out of steam?
At the beginning of July, the launchpad Pump.fun surpassed Ethereum (ETH) in terms of daily revenue. By August 13, the protocol had successfully generated a daily turnover of 5.3 million dollars, more than the 24 other most lucrative protocols combined.
To achieve this success, the protocol took advantage of an event during which it was possible to launch tokens for free to increase its turnover and increase its reputation.
Despite these good results, A question hangs over Pump.fun : Will Solana, the blockchain on which Pump.fun is based, be able to capitalize and build loyalty beyond the simple possibility of designing your own memecoins?
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As of early August, more than 1.5 million tokens had been launched through the protocol. However, only 22,330 of them were able to reach Raydiumknowing that you must prove a capitalization of at least $69,000 to be listed there.
So, less than 2% of tokens launched on Pump.fun manage to get to the DEXs, which is a very low ratio. Also, according to analyst Adam Cochran, few of them have exceeded the $20 million fully diluted valuation (FDV) threshold.
Several traders and employees of cryptocurrency exchanges have expressed their dissatisfaction with the incessant flow of new tokens, which according to them, would leave the door open to an overloaded market and to scams of all kinds. Please note that over the past few weeks, activity has decreased somewhat on the platform.
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Source : DefiLlamaCoinGecko
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Surprised by the rise of crypto-assets in the late 2010s, I started to closely follow this sector that fascinates me to the highest degree. When I am not in football stadiums, rugby or handball halls, I work on writing relevant articles about cryptocurrencies and more broadly, Web3.
Zacharie Tazrout
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