Pump.fun experiences worst performance in 7 months

Pump.fun, once a trailblazer in launching meme tokens on Solana, is now experiencing a dramatic downturn as its revenues and user activity decline sharply. 

Once celebrated as the premier Solana casino for high-risk token launches, the platform now faces a period of uncertainty and diminished liquidity.

Key Takeaways

- Revenue Collapse: Daily revenues have plummeted from record highs exceeding $15 million in January to just $667K on March 8, marking a 90% decline over a short span.

- Token Graduation Decline: Graduation of tokens from Pump.fun to the decentralized exchange Raydium has slowed dramatically, with only 194 tokens meeting criteria on March 8 compared to much higher numbers during peak periods.

- User Engagement Slump: Active addresses and new token creation have fallen significantly, with active addresses dropping from a recent maximum of 292K to 159K and only 7,233 wallets engaging in new token launches in a single day.

- Legal and Operational Challenges: Security breaches, legal pressures over intellectual property, and controversial AMM feature tests have compounded the platform’s woes, further discouraging investor confidence.

Declining Revenues and Graduation Rates

Pump.fun’s revenue performance has taken a severe hit as the fervor surrounding meme token launches has largely evaporated. At the height of the previous cycle in January, the platform’s daily revenues soared above $15 million. However, recent figures reveal a sharp drop to $667K on March 8, marking the lowest revenue level in seven months. 

Pump.fun revenue chart. Source: DefiLama

This downturn is critical because Pump.fun’s revenue model is closely tied to its token graduation process. Tokens are designed to enter a bonding curve upon creation, with their prices rising as more are purchased until they reach a market cap of approximately $100,000, at which point they graduate to Raydium. Recently, only 194 tokens have graduated, signaling a sharp contraction in market activity and investor appetite.

Falling User Engagement and Trading Volumes

The decline in revenue is accompanied by a noticeable drop in user engagement. Data shows that active wallet participation has declined from a peak of 292K active addresses to just 159K, reflecting a significant reduction in overall user activity on the platform. Furthermore, only 7,233 wallets were actively involved in creating new tokens in the past day, a steep drop from previous periods when the platform was at its prime. 

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Trading volumes have also taken a hit, with daily turnover now lingering at just over $77 million compared to peaks reaching up to $3 billion during the previous cycle. This dramatic reduction in both user engagement and trading volumes underscores the waning interest in meme token speculation on Pump.fun, which once drew large numbers of risk-taking traders looking to capitalize on volatile price movements.

Legal and Operational Challenges

Adding to the pressure on Pump.fun are several legal and operational challenges that have emerged in recent weeks. The platform has faced legal demands from law firms insisting that it remove tokens that infringe on intellectual property rights, including those using recognizable company names and logos. Moreover, a class-action lawsuit filed in January accused Pump.fun of offering and selling “highly-volatile” unregistered securities, further undermining investor confidence. 

The situation worsened with a recent hack of Pump.fun’s X (formerly Twitter) account, which was used to promote fraudulent tokens. Additionally, the platform has drawn criticism for testing its own automated market maker (AMM) feature—potentially intended to replace Raydium—a move that has sparked backlash from the community.

Market Impact and Future Outlook

The current downturn has led many to question whether Pump.fun can restart its casino cycle. With fee generation driven primarily by token graduations and trading fees (1.5 SOL per graduation and a 1% trading fee on token swaps), the sharp decline in both user activity and graduating tokens is a significant concern. The platform’s revenue extraction has nearly reverted to levels last seen during its slump in September 2024. Furthermore, the overall loss of optimism in the broader crypto market—exacerbated by aggressive rug pulls and sniping incidents—has contributed to a subdued trading environment on Pump.fun.

As Pump.fun’s revenues and user engagement continue to fall, industry analysts are closely monitoring whether the platform can innovate or recalibrate its approach to regain traction. For now, the downward trend appears set to persist, casting doubt on the platform’s ability to deliver the vibrant, high-risk environment that once defined it.

Recently we wrote, that Solana-based memecoin launchpad Pump.fun is experiencing a rapid decline in tokens graduating to the decentralized exchange Raydium.