Original title: Decrypt’s 2024 Project of the Year: Solana Meme Machine Pump.fun
Original author: Ryan S. Gladwin
Original source: https://decrypt.co/
Translated by: Daisy, Mars Finance
Decrypt 2024 Project of the Year: Solana Meme Machine Pump.fun
in short
Pump.fun allows anyone to become a meme coin “developer”, lowering the barrier to entry into cryptocurrency and opening the floodgates for a massive influx of capital.
As a result, more tokens have been created, purchased, and traded this year than ever before, driving “decentralized finance geeks” (degens) to flock to Solana.
Like it or not, Pump’s impact on cryptocurrency is undeniable, making it Decrypt’s 2024 Project of the Year.
It all started on a whim. Two developers, a laptop, and an idea to build a platform for launching cryptocurrency tokens fairly, cheaply, and easily — while minimizing the risk of scams.
The product wasn’t perfect, far from it. After launching in January, it likely led to more crypto scams, just in a different form. But by the end of the year, Solana meme token sale platform Pump.fun had become one of the cultural crypto projects of the year, and even the most important project of the past few years.
For better or worse, Pump.fun has lowered the barrier to entry in the cryptocurrency space. It enables anyone to create new meme coins — tokens whose value is derived from cultural significance, attention, and the “aha” effect. The platform has been responsible for the creation of more than 4.7 million new tokens this year alone, generating more than $317 million in revenue, and accounting for more than 60% of all decentralized transactions on the Solana network in the past three months.
“We’re really pushing the power of [decentralized finance geek] culture.” — Alon, co-founder of Pump.fun
“I think meme coins were somewhat inevitable, but they wouldn’t have taken off without Pump.fun,” Alon, the project’s pseudonymous co-founder, told Decrypt. “Without this innovation of really permissionless and very easy creation of tokens, we probably wouldn’t be here.”
While Pump.fun is not the first “no-code” token sale platform, it is the first to really catch on at scale. This has had at least two important industry impacts this year: an unprecedented explosion of meme coin trading in the short history of cryptocurrency, and a realignment of the on-chain economy.
Ethereum has been the dominant network for all things decentralized, tokenized since its launch in 2015, but has now been overtaken by a competitor, Solana, which launched in 2020. However, the process has not been without its fair share of controversy.
Critics have called the platform the worst of cryptocurrencies, and regulators have begun to take a closer look.
It’s fair to say, though, that Pump.fun has served this year as an unfiltered mirror to the entire crypto community — all its ambitions and anxieties. A contentious US election, fears of war and global unrest, and endless decentralization — every thing has been about the meme coin. It lit crypto culture on fire, sometimes outright, in 2024 and featured prominently in some of the industry’s wildest moments. For these reasons, Pump.fun is Decrypto’s Project of the Year.
“We really contribute to the power of [decentralized finance madman] culture,” Alon said. “That’s what this product is built for in a way. It’s about capturing these crazy moments and being part of history. We want to be a part of that.”
Meme Coin Revolution
The appeal of Pump.fun is that it makes creating a cryptocurrency simpler than ever before, redefining the meaning of the word "developer" or "dev" in the process. Creating a new cryptocurrency is no longer the preserve of the tech elite, skilled programmers with years of coding experience and deep pockets. Anyone can do it.
Your grandma can create a coin, your son can create a token, and many of them do.
Tens of thousands of new tokens are launched on Pump.fun every day, which means more opportunities for crypto traders young or old to try to make money. This is mainly driving demand for the product: that old desire to get rich quick.
Whether it’s one lucky trader turning a few dollars into millions, or a crypto wallet posting a tweet showing off amazing monthly profits in front of school on a regular morning, or a young teenager pulling in thousands of SOLs every morning, it’s all made possible thanks to Pump.fun.
In that light, the product fits in with what commentators and academics have long described as “financial nihilism” — the latest wave of a slow-motion disappointment, mostly among young people, about the American dream. The term, popularized in the wake of the GameStop meme crash in late 2020, essentially describes the deepening sense that it’s no longer possible to create wealth through traditional means. The system is rigged, all value is subjective, so you might as well try your luck speculating on meme coins, the idea goes.
If so, it might explain why young people are so enamored with the endless supply of meme coins. The problem is, the chances of getting rich overnight in meme coin trading remain extremely slim, with nearly 99% of tokens going to zero and insider trading problems rife — not to mention thousands of outright scams and “rug pulls.” But that hasn’t stopped crypto traders from dreaming, and this year they flocked to Pump.fun in search of the next 1000X, their attention tokenized.
As the world fascinated Moo Deng, a little hippo, traders at Pump.fun turned it into one of the biggest meme coins of the year. When Donald Trump gets shot, or a celebrity dies, or the US election takes a turn, meme coins pop up in seconds. Many decentralized finance geeks now boast of getting their news primarily from the platform’s front page.
As pop culture becomes financialized, Gen Z is getting in on the action — especially after last year’s TikTok meme “Chill Guy” was transformed into Pump.fun tokens and quickly surged to a market cap of hundreds of millions. The frenzy marked the largest single-day volume on Solana trading by payment service MoonPay, showing how times have changed.
Products like Pump.fun can’t exist on the Ethereum network because it’s comparatively slower and more expensive to use, especially when network activity spikes. While Ethereum is generally considered more secure, that doesn’t seem to matter to decentralized finance geeks trying to trade meme coins. Pump.fun clones have been tried on Ethereum’s second-layer networks like Base, which are more in line with Solana’s speed and cost-effectiveness, but have yet to gain the same traction.
As a result, Solana is now suddenly the go-to place for all things crypto — both culturally and financially. In September, Solana surpassed Ethereum in daily transaction volume and has maintained its lead ever since, with a current lead of $23 billion, according to Dune data.
Since Pump.fun accounted for over 60% of all Solana trades in the past three months, it’s safe to say that Solana’s comeback this year — after its reputation was damaged following the FTX and Sam Bankman-Fried debacle and its native token, SOL, lost 97% of its value — likely couldn’t have been without Pump.fun and its many meme coins.
How it started
But it wasn’t always this way. Back in January, Pump.fun’s pseudonymous co-founders Alon and Sapijiju were experiencing a winter of launching products — like influencer fundraising tools and self-proclaimed “silly” projects that didn’t gain much traction.
After encountering so many scams and questionable pre-sale token sales, two “trench warriors” decided to solve this problem. They created a product that would allow anyone to issue tokens for just a few dollars (eventually completely free), without allowing malicious contracts or malicious pre-sales, and promising a “fair sale” for every token.
You just fill in the name of the token, the symbol, a description, attach a photo, and if you like, add social media links. Like most decentralized finance projects, there is no need to create an account or authenticate yourself, just connect your Solana wallet and start sending coins. Pump then naturally takes a commission from all transactions on its platform, which is how it makes money.
“To be honest, we never really understood the market.” — Alon, Co-founder of Pump.fun
However, as the token creation process becomes standardized, scams must also evolve and become more sophisticated.
Now, bad actors are hacking into celebrity social media accounts, or buying up the initial token supply in bulk from side wallets at launch to defraud unsuspecting DeFi wannabes. An entire underground economy has formed to scam people on Pump.fun — bundling tools, scam professionals, review bots, etc. DeFi wannabes may no longer have to worry about compromised smart contracts, or sending SOL to presale wallets and worrying about whether they’ll actually get their tokens, but trading meme coins is certainly still not safe.
“Honestly, we never really understood the market,” Alon told Decrypt. “We were mostly trying to solve this problem. And we were really deep in it, trying to make it work.”
There was no grand opening for Pump.fun, not even a sip of beer between friends. It was just launched from a laptop by two founders who weren’t even in the same room and didn’t give much thought to what would happen next.
On the first day, Pump generated around $7,000 in trading volume — surprising even its founders and making them realize the potential of the project. “In a few weeks, all Solana tokens will be sold on Pump,” the Pump X account tweeted at the time. The two then set about improving their “kind of crappy” website, and Aron explained that their conviction began to grow.
Alon claims to have sent private messages to more than 3,000 people in the industry in the early days. It has become a running joke in the cryptocurrency community when people discover unread messages from founders.
You can’t blame them though. Most of the crypto community ignored Pump.fun in its early days, when the tokens launched on the platform were generally seen as low-value and not worth traders’ time.
That all changed in February when crypto influencer Ansem, who gained notoriety earlier this year for calling for Solana’s return, said hello to a Pump coin called Rosebot (ROSE), which surged to a $2.5 million market cap in 12 hours. While it doesn’t sound like much, Aron said it was “significant” at the time. Other influencers followed suit in March.
“Since that day, we’ve doubled our volume every day,” Aron told Decrypt. “I’m pretty sure the only way they heard about us was through organic channels. I do attribute our success to that organic approach and really connecting with people.”
Then, Pump.fun grew, and grew. The Shark Cat meme coin was launched on Pump in late March, reaching a market cap of $387 million by the end of the month — followed by Teh Epik Duck, then Michi, then Mini, and so on. Each was a huge success in its own right.
“Pump.fun changed the game,” 0xWinged, a pseudonymous trader and creator of the Shark Cat token, who is also one of the most followed individuals on Pump.fun, told Decrypt. “It became a tight-knit community of decentralized finance geeks (degens) who would invest in shit tokens with a market cap of less than $10,000 instead of traditional meme coins like DOGE.”
It wasn’t long before celebrities and pop culture icons took notice of Pump and joined the fun. Olympic gold medalist Caitlyn Jenner stunned cryptocurrency industry observers in May when she created a token on Pump.fun with the help of celebrity curator Sahil Arora.
Alola went on to launch numerous tokens for people like R&B singer Jason Derulo and rappers Lil Pump and Rich the Kid, all of whom claimed they were defrauded by Alola.
Suddenly, the platform was filled with hilarious meme coins, silly performance art stunts, and big stars like Iggy Azalea boosting the platform’s growth. But by the end of the month, dark clouds began to gather around the coin issuance platform.
Is Pump still fun?
The so-called livestreaming meta was another turning point for the platform. Pump.fun token issuers began livestreaming on third-party platforms to pump up their tokens in early May. It started with a young mother livestreaming on Kick and promising to perform sex acts if her son’s meme token “LiveMom” reached a certain market cap milestone. The stunt didn’t last long, and the mother and son disappeared.
This is again astonishing — in the attention economy, this is a valuable currency. And it only seems to encourage others to push the envelope further.
Later that month, a Pump.fun developer doused himself in isopropyl alcohol during a livestream and fired fireworks at himself, catching fire. Developer Mikol was rushed to hospital with third-degree burns over 30% of his body and spent months in rehabilitation.
“Unfortunately, when you combine the attention economy with the depravity of 4chan and cryptocurrency, you get a very unpredictable environment where people are willing to do anything to attract more attention,” Richard Podgurski, who claims to be the first person to create a livestreaming token on LiveTwitch, told Decrypt.
Pump.fun capitalized on this and quickly added a native live-streaming feature to its platform, establishing it as a place for marginalized people to gather, create, and comment on culture—like a combination of 4chan and meme coins.
And, in typical 4chan fashion—posts are anonymous and just about anything goes—the line between what’s real and what’s fake quickly blurs. The mood changes. More socially conscious decentralized finance geeks start to question whether things are getting out of control. Yet Pump.fun’s revenue numbers continue to soar.
It was around this time that a disgruntled Pump.fun employee, Jarrett Dunn, also known as Stacc, hacked into the platform and stole approximately $2 million in funds. Dunn initially claimed to be acting as a “white hat” with the intent to “kill” Pump, which he believed had caused harm.
In addition to the direct financial losses suffered by Pump, the reputational damage from the hack will be costly, even if only in the short term. According to a statement from Pump.fun’s co-founder in a police report obtained by Decrypt, the company failed to close a $20 million funding round due to concerns about the company’s management.
Court documents related to Dunn's allegations also show that Pump.fun is linked to a company registered in the UK, Baton Corporation Limited, which later became important. However, Pump.fun's co-founders dispute this by saying that the company is not registered in the UK. "Pump.fun has never been and is not a UK company," the pseudonymous Sapijiju told Decrypt.
In the months following the hack, the shenanigans on Pump only intensified, and by November the company was taking in as much as $5 million a day. During one week in November, users on the platform live-streamed themselves abusing animals, going on shooting sprees, and even faking suicide. It was a watershed moment. Things had really gotten out of hand, even for Pump.fun, which eventually shut down its live-streaming feature.
However, the attention economy has its two sides, and earlier this month the UK Financial Conduct Authority issued a warning to the platform. In response, the team decided to impose regional restrictions on the platform, limiting access to only UK users. Experts say this may just be the beginning of the platform's legal troubles.
“Pump.fun must face potential legal liability for its content moderation, including civil lawsuits from victimized users under Section 230 (the Freedom of Communications Act),” said Andrew Rossow, an online lawyer and reputation management consultant. “It also faces the risk of possible criminal investigations, including for wire fraud and possible violations of U.S. securities laws and EU data protection regulations.”
For two trench warriors who had no idea what they were getting into just 11 months ago, this certainly sounded like a lot of trouble. But it was inevitable. As Pump.fun grew, so did the risks and responsibilities it faced.
What happens next? Critics will probably say it’s unsustainable. The music will eventually stop. But if 2024 has taught decentralized finance geeks anything, at least so far, it’s that you have to respect Pump.fun.
