The current memecoin craze was created on top blockchains over the past year. Among them, a notable competitor is the Pump.fun marketplace operating on Solana, a cryptocurrency project reminiscent of the anonymous social media platform on the Ethereum blockchain 4chan.
More than 1 million memecoins created in 7 months
According to the report, since its launch in January 2024, Pump.fun has seen the birth of over 1 million memecoins on the Solana and Blast blockchains, making it the go-to platform for investors retail creates and trades this type of token.
However, the report notes that Pump.fun has faced criticism for perpetuating the perception of cryptocurrency as a “gambling arena.” Notorious “pump & dump” scheme issues in the cryptocurrency space have raised concerns about the integrity of the tokens created in the market.
While Pump.fun has attracted the attention of retail investors and even celebrities like rapper Iggy Azalea who launched a token called Mother Iggy (MOTHER) on the platform, skeptics say that Pump.fun allegedly reinforces the perception of cryptocurrency as a “speculative casino,” diverting attention from the technology's true potential.
Critics of tokens issued on the platform also highlight they often lack utility beyond meme status, potentially undermining the credibility of the cryptocurrency industry as a whole.
SEC crackdowns push users to memecoin?
Rachel Lin, CEO of decentralized derivatives exchange SynFutures, commented that Pump.fun's success reflects retail investors' "growing demand" for memecoin.
The SynFutures CEO believes that many retail investors, tired of traditional venture capital (VC)-backed token investments, find memecoin attractive because of its transparency and high profit potential. Because VC projects favor the interests of venture capitalists and the project itself, forcing investors to look for alternative paths.
The growth of memecoin can also be partly attributed to the U.S. Securities and Exchange Commission's (SEC) approach to regulating the crypto market and the recent crackdown on the industry, which has spurred crypto traders. Retail investing comes to memecoin.
Michael Selig, partner at law firm Willkie Farr & Gallagher LLP, explains that memecoins are the exact opposite of stocks, so investors buy memecoins primarily to express their opinions, participate in the community, think guess about the attentional value of cat images or for entertainment.
Summary of Pump.fun
Pump.fun aims to provide a quick and cost-effective means for anyone to launch memecoins while supposedly minimizing the risks associated with carpet pulling.
The project's anonymous co-founder, Alon, shared in a podcast interview in March that Pump.fun allows users to share "funny content" financially with friends by granting They are part of the meme's success.
To achieve this, Pump.fun uses an automated process where users can upload their favorite memes or JPEGs, a lossy compression method commonly used for digital images , along with the token's name and code, results in instant token creation with minimal fees under $2.
This platform uses mathematical modeling to determine the price of memecoins. The price will increase as more users purchase tokens. Notably, new tokens on Pump.fun are created through a fair launch method, releasing all tokens at once without presale, often at very low prices.
At the time of writing, SOL price traded at $139, up 3% on the day. The token has been in a consolidation range between $131 and $144 over the past week.
SOL 4-hour price chart | Source: Tradingview
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