Solana-based memecoin deployer pump.fun is shaking things up with a new incentive program. In a recent announcement, the platform revealed a reward system offering creators $80 worth of Solana (SOL) if their memecoin successfully completes a “bonding curve” and launches on the Raydium DEX. However, the question remains: will this be enough to curb the platform’s rampant rug pulls?
Lowering Barriers, Raising Concerns
The new program also eliminates the $2 launch fee, shifting the burden to the first buyer. This removes a hurdle for creators, but some worry it might attract bad actors. The low barrier to entry combined with the reward could incentivize “pump and dump” schemes. Early buyers could still purchase large quantities cheaply, inflate the price, and then dump their tokens before the bonding curve is complete, leaving latecomers holding the bag.
What’s a Bonding Curve?
Pump.fun utilizes a bonding curve to create guaranteed liquidity for new tokens on Raydium. Essentially, a small portion of each token purchase gets allocated to the curve, forming a pool of tokens and liquidity. Once the market cap reaches $63,000, the curve is complete, and the token launches on Raydium with this built-in liquidity. This model ensures users can always sell tokens, even if the price crashes.
While the incentive encourages creators to see their projects through, it doesn’t guarantee success. Large token holders can still dump their positions after launch, causing a price freefall. Statistics paint a concerning picture: as of August 2nd, a staggering 98.6% of tokens launched on pump.fun never completed the bonding curve and failed to reach Raydium. This raises questions about the platform’s success rate and its ability to foster sustainable memecoin projects.
Pump.fun’s Revenue Stream
Despite the challenges, pump.fun has seen significant revenue. The platform charges a 1% fee on all trades, which has generated substantial income. On July 29th, pump.fun’s daily revenue even surpassed that of the Ethereum network, highlighting its potential for profit.
Pump.fun was designed to promote transparency in memecoin launches. Unlike traditional methods with hidden pre-sales and insider buying, pump.fun makes all data public. Users can see the number of available tokens and their holders, preventing creators from manipulating the market.
While the new incentive program is a step in the right direction, pump.fun still has work to do. Additional measures are likely needed to combat rug pulls and ensure the platform fosters legitimate memecoin projects. Time will tell if pump.fun can overcome these hurdles and become a responsible launchpad for the next big memecoin.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
