Since launching at the beginning of the year, Pump.fun (usually pronounced “pump dot fun”), the Solana-based memecoin launchpad, has become the fastest-growing crypto app of all time.
The platform took just 217 days to hit $100 million in revenue — 34 days faster than the second-quickest decentralized application to hit that milestone, ENA, according to Syncracy Capital co-founder Ryan Watkins.
Despite this explosive growth, Pump.fun has stirred controversy. While some people view memecoins as harmless fun or even a viable sector for growth for an industry largely devoid of obvious use cases, others see these purposefully pointless tokens as value extractive.
“Bilking suckers out of their Crypto is nothing new, but Pump.fun raises it to an art form. It's all the worst elements of our industry condensed into one epilepsy-inducing website,” University of Dublin lecturer Paul Dylan-Ennis told The Block in a direct message. “If you wanted one project to symbolise everything that people hate about is, look no further.”
Crypto researcher and Glue founder Ogle said that nearly 95% of memecoins launched on Pump.fun “end up effectively rugged within a day of launching.” That said, Pump.fun has seen a decline in trading volumes from a peak of over $2 million on July 30 to around $400,000 on Sept. 6.
The conversation around memecoins has been especially heated leading up to the second U.S. presidential debate slated for Sept. 10. Major news events tend to be fertile ground for memecoin creators looking to capitalize on trends and standout moments.
‘Monetize culture’
An entire category of tokens, called PoliFi, has emerged around politicians like the memecoins MAGA TRUMP
+2.95%
and BODEN
+7.44%
. “If you’re a sensitive American, please avoid visiting pump fun over the coming 48 hours. There is a storm brewing,” Pump.fun wrote on X, making light of the trend.
Brian Frye, a lawyer specializing in copyright law, said celebrity memecoins might reflect an investment in a brand. However, there is something of a spectrum where tokens could develop “commercial goodwill” or be “a zero-sum game.”
“In other words, they have to shift from gambling to investing in order to make sense,” Frye said.
Start your day with the most influential events and analysis
happening across the digital asset ecosystem.
It’s a point echoed by ETHDenver co-organizer Caolán Breathnach who said memecoins are a way to “monetize culture” and crypto culture researcher Ann Brody who noted “money was always cultural and a representation of who we are.”
“I think memecoins, as a tool, have a lot of ability to draw in energy into web3 (based on how people relate to the tech through them),” Brody said in an email to The Block. “These are stories and beliefs about our world that people use coins to signal and reaffirm their ideas about.”
Although memecoins may reflect some cultural attitudes, many see them currently as a glorified form of gambling. It’s worth noting that during the last presidential debate in June between Trump and President Joe Biden — who has since dropped out — nearly all candidate-themed memecoins tanked.
‘Digital version of Macau or Vega’
“I don't hold it against Pump.fun for creating a product that people wanted to use, but it's definitely enabled behavior that continues to make our industry seen as a digital version of Macau or Vegas. One that's only for degenerate unregistered gambling,” Morph co-founder Azeem Khan told The Block.
“The dangerous part of that is it's a net negative for the industry at large in terms of perception. We went from the ICO bubble of 2017, to the NFT bubble of 2021, to what's now the memecoin bubble of 2024,” added Khan.
Others, like Roko Mijic, of Roko’s Basilisk fame, noted that memecoins — extractive or not — are likely the result of onerous regulations that have prevented capital formation around genuinely useful protocols.
“Basically, Gary Gensler is costing the industry trillions of dollars by making all of the interesting, prosocial uses of crypto de facto illegal,” Mijic said. “People will always gamble but if there were more legitimate opportunities, the gambling would be marginalized.”
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
