Pump.fun faces with crisis of quality memecoins
Pump.fun memecoin graduations plummet amid market downturn.
Solana-based memecoin launchpad Pump.fun is experiencing a rapid decline in tokens graduating to the decentralized exchange Raydium.
Graduation numbers have collapsed amid a broader market sell-off and waning interest following high-profile, controversial celebrity token launches.
Key Takeaways
- Sharp Graduation Decline: Token graduations on Pump.fun have fallen from a peak of 24,008 in January to only 11,532 by the end of February.
- Market Sell-Off Impact: The memecoin sector, represented by the GMCI Meme index, has dropped over 30% in the past month, with a 45% year-to-date decline.
- Legal and Operational Challenges: Recent legal pressures and platform security breaches have added to Pump.fun’s struggles.
- Revenue Collapse: Daily revenue plummeted from a peak of $15.4 million on January 25 to just $1.1 million as trading volumes and fee extraction nosedived.
Declining Graduations and Market Sentiment
Pump.fun tokens enter a bonding curve upon creation, with prices rising as more tokens are purchased until a market cap of about $100,000 triggers graduation to Raydium. In January, a record 71,735 tokens were launched, coinciding with a frenzy driven by celebrity-endorsed memecoins from figures like President Trump and Argentina’s Javier Milei.
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However, with daily token launches falling to 25,385 by February 26 and graduation rates dropping from 2.1% at peak to an all-time low of 0.7%, the memecoin hype appears to be rapidly evaporating.
Legal, Security, and Revenue Pressures
The collapse in graduation figures is compounded by several challenges. Law firms have demanded the removal of memecoins infringing on intellectual property, and a class action lawsuit in January accused Pump.fun of selling highly volatile unregistered securities. A recent hack of the platform’s X account further dented its credibility.
Moreover, Pump.fun’s fee extraction practices have come under fire as its total revenue of over 3 million SOL—once bolstered by high daily revenues peaking at $15.4 million—has now tumbled to $1.1 million. As Pump.fun deposits and sells SOL, with the coin trading around $140 (down over 40% in the past month), the platform faces an uphill battle amid a cooling memecoin market.
Solana price chart. Source: coinmarketcap.com
Recently we wrote, that Pump.fun, a leading platform for on-chain meme token creation, has officially launched its long-awaited mobile app, sparking a wave of new activity in the crypto space.
