The token launch platform Pump.fun, which became popular in this bull market with its “one-click token launch” feature, saw a 30% drop in average daily transaction fee income compared to the previous week, which in turn affected the activity of the Solana ecosystem.
(Background:
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The memecoin, which easily creates hundredfold myths, has been the focus of attention in this round of cryptocurrency bull market, and the low transaction fees of the Solana public chain make it an excellent breeding ground for memecoins.
The token launch platform Pump.fun seized the enthusiasm of investors for memecoins and launched a simple and fast “one-click token launch” feature, allowing users to easily issue memecoins. For a while, the Solana ecosystem sparked a “nationwide trend of token launches,” and the number of memecoins also surged, thereby promoting the rapid development of Pump.fun.
30% drop in daily transaction fees
However, as the sentiment in the cryptocurrency market continues to decline, the memecoin sector has also shown signs of fatigue. According to foreign media reports, Pump.fun’s average daily transaction fees dropped from $870,000 in the previous week (6/10~6/16) to $605,000 in the last week (6/17~6/23), a decrease of up to 30%.
The report further pointed out that the decrease in Pump.fun’s transaction fees may stem from the continued market decline, leading to a general decrease in user risk appetite. However, for the Pump.fun platform, the decrease in risk appetite is particularly severe because the assets it deploys are the most speculative products in the cryptocurrency market, attracting users seeking quick profits, but they will also withdraw quickly when the market deteriorates.
In addition, compared to the previous week, the significant decrease in transaction fees indicates a relative decrease in the deployment of tokens and overall activity, which also means that Pump.fun’s token deployment may have reached an oversaturated level.
Solana’s overall activity may see a significant decline
The report also mentioned that Pump.fun accounted for an average of 35% of Solana’s total transaction fee income in the past two months. It is worth noting that this 35% proportion does not include the transaction fee income generated when Pump.fun deploys tokens to decentralized exchanges (DEX) or aggregators.
Note: After Pump.fun deploys tokens, when the bonding curve of the tokens reaches 100%, the liquidity of the tokens will be deposited into the decentralized trading platform Raydium, and users can use Raydium for trading.
The high activity and huge fees generated by Pump.fun and its deployed tokens have shown significant user participation and brought tremendous economic activity to Solana, although the user group it attracts is those seeking high-risk, speculative returns.
However, this reliance may also bring potential risks. Pump.fun’s speculative nature means that it is inherently cyclical and prone to rapid fluctuations. If the speculative enthusiasm wanes or market conditions become unfavorable, the platform’s activity may slow down significantly, which could lead to a significant decrease in transaction fees and overall activity on Solana.
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Differences in the current development of NFTs and memecoins compared to the previous bull market.
The memecoin frenzy is not over: But be careful not to marry your memecoin, playing with fire**