Source: The DeFi Report
Original Title: pump.fun memo
Compiled and Organized by: BitpushNews
Preface:
As a controversial but highly lucrative meme coin generation platform in the Solana ecosystem, Pump.fun has generated fee income that almost matches the entire Solana network (base fee + priority fee) so far this year. However, the current trading price of the PUMP token is nearly 99% discounted relative to SOL. This week's report will delve into Pump.fun and the "Launchpad War" it has sparked within the Solana ecosystem.
Disclaimer: The views expressed in this article are the author's personal opinions and should not be considered investment advice.
Product and Business Model
Pump.fun is a Solana-based platform that allows anyone to instantly create and trade new tokens (primarily meme coins) with almost no initial liquidity requirement.
The protocol's revenue model is primarily driven by trading fees, building a complete product suite:
Mobile and desktop applications: Providing user-friendly interfaces.
Live streaming functionality: Creators can promote their tokens through live streams.
Streamlined interface: Users can publish tokens and start trading within minutes.
Integrated Bonding Curve: This is the primary method for users to purchase platform tokens. When a token's market cap reaches $69,000, it "graduates" and enters the Pump.swap DEX for trading. Pump charges a 1% fee on each bonding curve buy and sell transaction, which constitutes about 88% of its revenue.
Pump.swap DEX (launched in March this year): For "graduated" tokens, Pump charges a 0.05% fee per transaction (with liquidity providers receiving 0.20% and token creators receiving 0.05%). Currently, this accounts for about 12% of total revenue.
A Wired survey shows that Dylan Kerler was involved in issuing (controversial) tokens on Ethereum as early as 2017, when he was only 16 years old. This history (despite its specific context) indicates that Kerler brought technical expertise and a deep understanding of the viral crypto market to the team. Noah Tweedale and Alon Cohen appear more as public figures, with Tweedale often considered the business lead, and Cohen actively communicating platform updates and concepts on X (Twitter) and in the media.
Despite their youth, Pump's founders expanded the platform at an unprecedented speed. This year alone, they have issued over 6.6 million tokens (totaling 12 million), and the platform has attracted 22 million addresses. The team currently has around 50 employees, primarily composed of engineers, data scientists, security experts, and others.
Pump's rapid rise initially benefited from a self-sustaining development based on its own revenue. However, the project has attracted major investors through recent funding rounds:
Recent ICO (essentially Pump's Series A funding): Raised a total of $1.3 billion. $600 million came from the public ICO (sold out in 12 minutes on Saturday!), and $720 million was obtained through a private placement for institutional investors. All ICO investors purchased tokens at $0.004 (with a fully diluted valuation of $4 billion).
Private Round: The token allocation for the private round (18% of total token supply) went to mostly undisclosed major supporters. However, industry reports indicate that several top crypto funds and companies participated in this private placement, including Pantera Capital, Blockchain Ventures, and Kraken's venture capital division.
Existing Investors: 13% of the token allocation was reserved for "existing investors", indicating that some early private placement investors had already entered before the July ICO. Major cryptocurrency exchanges including Bybit, KuCoin, Gate.io, MEXC, Bitget, and Kraken facilitated this token sale, suggesting these companies may have also received token allocations.
Product market fit and distribution capabilities in high-growth markets (meme coins + creator economy).
A young, competitive team that has demonstrated rapid execution capabilities.
A grand vision - to establish a social/consumer application that can disrupt the existing social/consumer application business model.
Controversy. This may seem unusual, but usually, big winners have this trait.
As mentioned earlier, we have been looking for social/consumer applications that stand out in the crypto field.
It may have arrived.
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