Solana price drops as Pump.fun fails to launch 98% of tokens

Solana (SOL) has seen a significant pullback, with the token's price falling amid growing concerns about blockchain in failed launches on Pump.fun.
Pump.fun, a platform for issuing meme tokens, holds a staggering 98% of SOL tokens in multiple failed project launches, which has caused alarm in the blockchain ecosystem, Сryptopolitan reported.
Massive SOL lock-up through Pump.fun
Reports reveal that Pump.fun contracts have locked up approximately 58 million SOLs out of a total supply of 474.8 million tokens, with some estimates suggesting as much as 58 million SOL may have flowed into the platform through bonding curves. These mechanisms, designed to facilitate liquidity for new projects, have instead backfired as most projects launched on the platform have failed to generate substantial market traction.
A small percentage of meme tokens end up in Raydium, transferring all collected liquidity to DEX.Some memes turn out to be a tug of war mat, putting SOL in the hands of token developers. But many tokens remain locked up, unable to meet market capitalization.
Pump.fun is still the main source of tokens generated on Solana, responsible for 70% of all assets, with the remaining 30% being created by other projects and tools.
Consequently, large amounts of SOL remain trapped, leading to liquidity concerns and exacerbating the token's price decline.
Market impact and community concerns
Solana's price has fallen more than 6% in a week and is hovering around $243, reflecting diminished investor confidence. Market analysts have pointed out that Pump.fun's model, while innovative, has inadvertently contributed to a bottleneck, immobilizing millions in SOL liquidity. Community members have expressed frustration over the lack of oversight and the potential for similar issues to arise with other decentralized bonding curve platforms.
The ongoing challenges posed by Pump.fun highlight the importance of risk management and due diligence in the decentralized finance (DeFi) sector. For Solana, the incident underscores the need for tighter ecosystem checks to prevent further liquidity lock-ups. Analysts suggest that while the blockchain remains robust, resolving the Pump.fun issue could restore market confidence and pave the way for a price recovery.
In the meantime, Solana’s developers and community leaders are urged to collaborate on mitigating such risks, ensuring the blockchain's long-term viability and maintaining its reputation as a leading DeFi platform.
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