Pump.fun’s rapid growth and $700M in protocol revenue highlight its strong fundamentals.
Can retail investors really benefit from PUMP?
Pump.fun, a memecoin launchpad that launched in early 2024, has grown rapidly by making it easy for anyone to create and trade tokens with almost no technical knowledge.
Now, the team is planning to sell its own token, PUMP, at a $4 billion valuation, aiming to raise $1 billion. The move, while ambitious, has drawn mixed reactions.
Critics argue that the high price limits meaningful gains, especially for retail buyers who enter at peak valuation. So, does the PUMP launch represent a high-risk gamble where retail ends up as exit liquidity?
Who really benefits?
Pump.fun started with a simple idea — challenge the big DeFi platforms that make money from staking pools. Normally, users lock their tokens in those pools and earn yields over time.
But Pump.fun took a different route. It lets anyone create and trade memecoins instantly. Every time someone buys or sells, the platform earns a small fee. And the results speak for themselves.
In just a few months, Pump.fun has facilitated the launch of over 11 million tokens and generated nearly $700 million in protocol revenue, ranking it in the top five across all crypto protocols by 30-day earnings.
Source: Dune
That’s really the bullish angle on PUMP.
If Pump.fun goes ahead with a revenue-sharing mechanism, where 25% of protocol revenue is used for regular buybacks of the PUMP token, it could create sustained buy pressure.
In simple terms, every time someone launches or trades a coin, a small fee gets collected, and part of that could go toward supporting PUMP. So, if Pump.fun keeps making money, the PUMP token could grow with it.
But that doesn’t mean it’s all upside. Those who got in early, might still end up with most of the rewards, while smaller retail investors could be left holding less of the pie.
As Pump.fun booms, retail risks being left behind
PUMP’s tokenomics reveal potential risks.
The total supply is set at 1 trillion tokens, with 10% (100B) allocated for an airdrop, likely targeting early users. Another 25% (250B) is reserved for a public token sale, aiming to raise $1 billion at a $4 billion FDV.
But the catch is, that entire 25% from the sale will be fully unlocked on day one. No vesting, no cliff. That’s great for early buyers who want instant liquidity.
However, it also opens the door to serious sell pressure right after launch. If everyone’s looking to flip for a quick gain, the price could shoot up fast, then crash just as quickly.
That’s why some people are calling it overvalued and cautioning that this setup could end up hurting retail the most.
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