Pump.fun is going to issue coin, what does the community think?

This article整理了 multiple industry observers对 this event的不同看法, covering project valuation structure, user incentive design, ecological impact assessment and other dimensions, attempting to restore a more complete discussion of the overall picture for readers.

Written by: shushu, Rhythm

Recently, although there are still tens of thousands of tokens emerging daily on the Solana chain in the cryptocurrency market, it has been a long time since the last “everyone chasing dogs” phenomenon, and the market has entered a state of high frequency but weakness. Against this backdrop, the hot infrastructure Pump.fun has been reported to raise $1 billion with a $4 billion FDV and officially issue its platform token $PUMP.

The market has reacted differently to this. On one hand, Pump.fun has demonstrated strong user engagement and revenue capabilities on the Solana chain over the past year, achieving daily revenue peaks exceeding ten million dollars, supporting its high valuation logic. On the other hand, there are many voices questioning the sustainability of its profits, whether the platform’s tokens have a reasonable value capture mechanism, and its negative impact on Solana’s liquidity.

More importantly, this valuation level is approaching that of compliant cryptocurrency 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 fluctuations, which also challenges the long-term validity of the valuation.

This article compiles the different views of several industry observers on the event, covering multiple dimensions such as project valuation structure, user incentive design, and ecological impact assessment, attempting to present a more complete discussion for readers. Whether this is the final sprint under the liquidity tide or a crucial battle in the platform’s transformation may still require time for validation.

Related reading: “With a valuation of 4 billion, is Pump.fun a market savior or a liquidity killer?”

Pumpfun is an ecological predator and does not deserve support.

@imperooterxbt

The Pumpfun team made 10 million dollars from transaction fees, and all the profits went into their own pockets. Launchcoin also made 10 million in transaction fees, but only took 20% of that.

Pumpfun backstabbed Raydium—a veteran protocol that supported it from the early days. It also launched its own Pumpswap on Raydium, but now it is eating into each other’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 biggest sources of selling pressure on Solana. Meanwhile, Raydium at least uses transaction fees to buy back its platform tokens, while Pumpfun does nothing. Pumpfun is not good for the entire ecosystem. Its founder is not here to help Solana, but to plunder.

In contrast, the Believe app can at least be considered “relatively better among two bad options.” Pasternak is at least willing to win together with existing projects and takes less. Pumpfun doesn’t treat users as people at all, only seeing us as ATMs. If it continues to drain the ecosystem and exploit other applications, Solana will ultimately decline along with its users. It’s time to stop supporting those applications that never give back to users.

Overvalued and Lacking Transparency

@S4mmyEth

Will token holders of Pump.fun be able to receive transaction fee dividends in the future? Or will there be a built-in token buyback mechanism? If neither is the case, then I really cannot see what value there is in buying this token at a valuation of 4 billion dollars.

What’s even more outrageous is that the total market value of all meme coins issued on Pump is only 500 million dollars more than the amount they raised this time. Early investors have really benefited from this; as I recall, the valuations in the previous rounds of financing were 12 million, 100 million, and 250 million dollars respectively.

In other words, the earliest round of book returns reached 333 times! However, loyal users currently have no information related to airdrops—I have more questions than answers right now.

This is a test of Solana’s liquidity

@MiyaHedge

The first round seed funding valuation of PumpFun is 12 million USD. This means that seed round investors have already achieved a book profit of 322 times on $PUMP in this round, and if estimated by TGE (Token Generation Event), it may have already increased by 1000 times.

This industry is simply crazy. But unfortunately, I can’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 probably do the same thing. They really need this $1 billion in funding to compete with platforms like Kick and Twitch.

I might choose to airdrop a large amount of tokens back to community users—after all, everyone is already addicted to gambling, and the liquidity gained will eventually flow back to the casino (PumpFun). What’s interesting is how large this on-chain “stimulus plan” will actually be? Will it drain on-chain liquidity, or will it increase it instead? To be honest, I tend to think it will drain liquidity—which seems to contradict the mainstream view on Crypto Twitter (CT).

I prefer to see this as a transfer of wealth—from richer individuals to airdrop recipients through the liquidity pool of PF (funded by VC). At the same time, perpetual contract funds will also drive up spot prices, effectively becoming exit liquidity for airdrop users.

Overall, I believe that the launch of this token is more beneficial than harmful to the on-chain ecosystem.

The valuation may be reasonable, but the financing method raises concerns.

@deadbolting

Some detailed views on the token issuance of Pump.fun (the following opinions are based on the premise that the information circulating on Twitter is true)

A valuation of 4 billion USD may be reasonable, but the scale of financing is indeed too large. Raising 800 million USD solely from retail investors is likely to suppress buying demand at the TGE (Token Generation Event), thereby limiting the potential for price increases.

This scale of fundraising 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 projects in the Solana ecosystem might. Ultimately, coins with strong fundamentals will rebound even after experiencing short-term liquidity drain.

The airdrop ratio is only 10%, which seems quite small. A more appropriate range should be 15%-20%.

I would be surprised if the token’s FDV (Fully Diluted Valuation) drops below 3 billion for a long time. Although the platform’s revenue growth has indeed slowed down, pump.fun is still the leading meme coin issuance platform and has a very high user mind share.

mcap/fdv (the ratio of market cap to fully diluted valuation) will greatly depend on the degree of control over its token supply—or whether there is essentially no control at all.

Using 25% of the platform’s revenue for token value buyback is actually on the lower side (especially compared to Hyperliquid’s 97% buyback). While I don’t expect them to reach that level, a ratio of 50% might be more appropriate.

Overall, I don’t think a valuation of $4 billion is a disaster (it might even be temporarily “scam-like” inflated to $6-8 billion), but their current financing methods and scale worry me: by the time TGE actually goes live, there may be no new buyers in the market, while there will be a large number of investors holding 25% of the total supply waiting to dump.

Mistake in Timing Selection

@milesdeutscher

Some unfiltered thoughts and opinions about the Pump.fun token:

About the Pump itself:

I personally feel that the timing of the token issuance is a bit late. The platform’s fee income has already明显放缓, which will have a negative impact on market sentiment and external perception.

They have already earned $738 million in fees… If a part of this is not returned to the ecosystem as incentives, I really don’t know what to say (on the surface, this almost goes against the philosophy of $HYPE - but until more details about the token economy are released, let’s give them some trust space for now).

They don’t need to raise another $1 billion (they already have over $700 million on hand!)… It’s completely “using a cannon to kill a chicken,” and it’s obviously an opportunistic behavior to take advantage of the situation.

Regarding potential chain effects:

There may be a certain negative impact on $SOL in the short term, as some funds will be shifted from SOL to $PUMP. Many people previously bought SOL essentially to speculate on the increase in revenue related to the transaction fees of the Pump.fun platform.

However, this rotation of funds is likely to evolve into a typical “buy the expectation, sell the news” market, meaning that the downward pressure on SOL was actually priced in by the market even before the news was officially released.

This will lead to the SOL/ETH exchange rate continuing to weaken (although it is already near the support level), and trigger some funds to rotate into other L1 public chains in advance.

From a macro perspective, this rotation of funds may not necessarily be a bad thing: I have personally made a considerable amount 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 has a high frequency of rotation.

I am still not pessimistic about the long-term performance of SOL. Its ecological stickiness and user mindset are already very strong, but we do need to be cautious of the impacts brought by this volatility in the short term. 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 encrypted social network.

@WagmiWan

I don’t think 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 lot of money, and I’m willing to bet they’ve brought in quite a few of the top VCs. If a large number of retail investors FOMO enters the public offering stage, it may trigger a lot of selling pressure. After all, buying at a valuation of $4 billion is far less beneficial to the average user than the risk they face – it could easily become an “exit liquidity” for early-stage private investors.

Given their current revenue levels, they actually do not need to seek further financing—unless there is a bigger vision behind it. They also understand that this “casino model” is unsustainable. It is highly predatory, with insiders, packagers, and snipers profiting at the expense of others. The premise for this system to function is that there needs to be a sufficient number of “suckers” coming in every day to hand over money, but this is destined not to last.

In my opinion, the reason why they raised 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 just need to go to Pumpfun. A closed-loop ecosystem, an attention funnel, all revolving around $PUMP, with revenue coming from its token issuance platform and AMM.

However, challenging these social giants is extremely difficult, which is also why they need large amounts of funding. One major use of $PUMP is likely to incentivize content creators and users—earning income from posts, receiving returns from live broadcasts, and distributing tokens through driving interactions.

However, I guess that those early users who are looking forward to the Pumpfun airdrop may end up disappointed.

If they really succeed, it is highly likely that they are aiming for an IPO.

Token issuance is a carefully designed scheme to harvest retail investors.

@hellosuoha

Why do you think Pump Fun is issuing tokens? It is well known that @a1lon9 is a cs, and is issuing tokens to help everyone get rich? Most likely it’s to extract market liquidity in the end.

As everyone knows, the biggest cancer in this cycle, especially on @solana, is the @pumpdotfun team, which has sold all the money earned into usdc and taken it away. If you say that @a1lon9 issued $pump to help everyone make money, I don’t believe it. So it’s just to “make one last profit.”

Why wasn’t it released in January? The earliest rumor was that the coin would be released in January, in collaboration with cex for a public offering, but then $Trump came, and the market’s liquidity was completely drained.

Then @a1lon9 directly said there was no plan to issue tokens. Is that true? Originally, they wanted to drain liquidity, but found out that it was drained by the Supreme Leader, so they can only wait for the next liquidity drought.

Why send it at this time? Mainly because there are too many launch platforms on @solana, all coming to siege it, especially @SolanaFndn who also really hates pumpfun.

Take a look at @bonk_fun + @believeapp + @boopdotfun+ @buidldao_ and many more. Although the emission volume of @pumpdotfun is still the first, I am still a little worried about being exceeded. In addition, the market has been very good recently, especially this @ethereum has driven copycats, so that @a1lon9 may feel that if they miss this wave of coins, they will become the next @opensea. Remember how high the valuation of @opensea was in 2020-2021. Look at it now, does anyone still look at it, there are still 1.4 billion in 24 years, and it is estimated that it will definitely be gone now.

Perhaps @a1lon9 also thought of this, so they still need to finish distributing the tokens quickly to give all shareholders and themselves an explanation. After all, if they miss it, there may never be another chance. It’s time to take a big cut, completely Fair Launch.

Currently, there are two external statements: one is to raise 1 billion at a valuation of 4 billion, and then go fully circulating; the other is to raise 1 billion at a valuation of 5 billion, and then go fully circulating. The cheapest investor around is @BiliSquare, a friend of a friend who invested 30M, and then there is @hebi555 who mentioned 200M and 800M, which all seem to be fully circulating. It’s highly likely that everyone is participating based on the last round’s valuation release, then TGE 100%, and everyone buys in waiting for a doubling?

Possible plays? After all, according to the current situation, @pumpdotfun earn money for 8 years at a time after the issuance of coins, and I don’t care about the income of 700m a year. It’s “the one who is willing to take the bait” Anyway, anyway, even if you open 10 billion, someone will buy it, after all, it is a “huge casino” in itself.