Pump.fun is a one-click issuance platform for Meme tokens based on Solana launched in February 2024. It later added support for Ethereum L2 Blast and has become the Memecoin platform with the largest traffic in the Solana ecosystem. The following is a detailed introduction:
Functions and features
• Low threshold to create tokens: Token issuers only need to enter the name, description and picture of the token and pay about 0.02 SOL to start the token "fundraising" issuance process.
• Unique price curve: The token price is calculated using the Bonding curve, which means that the token price increases as the fundraising progresses and decreases as the tokens are sold.
• Integrated social attributes: Tokens must be accompanied by pictures and introductions, and have comment functions, which facilitates the rapid dissemination of the stories and styles behind them, giving them the ability to socialize and effectively spread.
Running the process
• Create tokens: After the issuer enters the relevant information as required and pays the fee, the token fundraising and issuance begins.
• Intra-market fundraising: Users select the tokens they want to participate in, enter the purchase quantity, and participate in the token issuance fundraising. They can sell their shares before the issuance, and the platform charges a 1% fee.
• Token issuance: When the market value of tokens purchased by users reaches $69,000, the platform will add $12,000 of liquidity to Raydium and destroy LP.
Risks and Controversies
• High investment risk: Most Meme projects have a short average lifespan, a large number of bad actors deceive investors through scams and marketing, more than 60% of traders lose money, and less than 10% of traders make significant profits.
• Security issues: In May 2024, Pump.fun suffered a major security attack. A former employee used the Solana lending protocol to conduct a flash loan attack, causing the platform to lose 123,000 SOL.
