How Memecoins Explode and Crash Fast on Solana’s Pump.fun Platform

Key Takeaways

• Pump.Fun’s memecoin launches peaked in November 2024.
• Most memecoins die within the first 24 hours of launching.
• Only a small percentage of Pump.fun Wallets have made a profit.

Pump.fun is a Solana-based memecoin launchpad that peaked in late 2024, driving Solana’s (SOL) surge to a new all-time high of $296 in January.

Despite its success, it faces criticism for draining crypto market liquidity and lawsuits alleging securities violations.

Although activity and revenue have declined, Pump.fun still hosts over 90% of memecoin launches, maintaining its lead in the space.

This article will analyze Pump.fun’s profitability during its peaks and troughs and analyze the chances of success for memecoins launching on it.

What is Pump.Fun?

Pump.fun is a Solana-based memecoin launch platform that peaked at nearly 70,000 daily memecoins launched in November 2024, at the height of the crypto market memecoin mania.

It has been in the spotlight consistently, being considered the main reason for SOL outperforming ETH.

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However, it is also accused of sucking liquidity from the rest of the crypto market, which is the main reason for the lack of an altcoin season.

This year, it was hit by a lawsuit from Burwick Law, alleging the platform violated securities law, suggesting that all tokens created using Pump.fun are securities.

Buyers of two memecoins, PNUT and HAWK, have separate lawsuits against Pump.fun.

Earlier this month, the Pump.fun founder’s account was suspended on X, sparking rumors of his arrest, which eventually proved unfounded.

The platform previously announced the launch of its token, raising $70 million from private investors, but delayed the launch to mid-July.

Pump.Fun Statistics

The Pump.fun total revenue is $626 million. Since the memecoin platform has profited for 14 months, the average revenue is $1.5 million daily.

Revenue has decreased drastically in the short term. In the past 30 days, Pump.Fun has recorded revenue of $7.2 million, while it has only recorded $1.7 million in the past seven days, roughly $0.24 million per day.

The decline is not simply due to the falling SOL price since a similar discrepancy is visible when measuring the revenue in SOL.

The main reason for the revenue drop is the declining volume at its peak. Pump.fun had a weekly volume of over $3 billion, while it currently has less than $1 billion.

Therefore, the decreased interest in memecoin launches has caused volume and, in turn, profitability to decline significantly.

Nevertheless, Pump.fun is still winning the memecoin wars, with over 90%  of the deployment market share.

Wallet Profitability

Despite the considerable revenue and seemingly massive profitability of memecoins, most wallets are losing money.

11.5 million wallets are unprofitable, while less than 10 million are profitable. At first glance, this seems a decent outlook for trading something as volatile as memecoins.

However, the specific numbers relating to profitability are far less flattering.

Nearly 8.5 million wallets have profited less than $1,000, and another 750,000 have profited between $1,000 and $10,000.

Therefore, 9.2 out of the 9.9 million wallets have made less than $10,000 in profit.

Dividing by the total number of wallets, 0.6% of wallets have made more than $10,000.

Only 8,100 wallets have made more than 1 million, 0.03% of the total wallets.

Therefore, the numbers show that only a small percentage of traders have made money trading memecoins, and a minuscule number have made significant profits.

How do Tokens Perform?

Memecoins are launched in Pump.fun, and if they meet specific criteria, they graduate to Raydium, Solana’s central decentralized exchange.

Once the memecoin reaches a market cap of $69,000, Pump.fun flags it as eligible for graduation.

Then, the project has to create a pool of $12,000 – $17,000 in SOL liquidity before paying a 6 SOL graduation fee.

While a market capitalization of nearly $70,000 is not massive in crypto, it has been challenging to reach due to the sheer size of memecoin launches.

Pump.fun launches nearly 24,000 tokens daily, while only 1.13%, or 284, graduate.

Interestingly, those who gain immediate exposure are those who graduate. Nearly 40% of the memecoins that graduate do so in under 5 minutes, and another 27% between 5 and 30 minutes.

So, the more time passes, the less likely the memecoin is to graduate.

Only 25% of the memecoins record activity after 1 day, and 7% of the tokens record any activity after 7 days, meaning that 75% of the launched fail after the first day, and 93% fail after a month.

The graduation rate has also fallen sharply since the November peak. At the time, roughly 1.60% of all tokens launched graduated, while less than 1% currently do.

Nevertheless, this is still better than the 0.5% low of April, which also coincided with the crypto market low.

The data shows a correlation between the memecoin graduation rate and the crypto market performance.

Moreover, even tokens that graduate do not always increase in value.

While the threshold for graduation is a market cap of $69,00, the average market cap of graduated tokens currently stands at $29,500 , noting a 60% decline from the minimum market cap at graduation.

Big Winners

The biggest token launched in Pump.fun is FARTCOIN, followed by Peanut the Squirrel (PNUT) and Moo Deng.

While Fartcoin’s market capitalization once ranked it #58, it has nearly fallen outside the top 100.

No other Pump.fun memecoins are ranked in the top #200 biggest cryptocurrencies, and only seven rank in the top 500 largest cryptocurrencies.

Considering the minuscule chances of a memecoin succeeding in Pump.fun, the data shows that even the few that make it fail to reach the big leagues.

Minuscule Chances of Success

While Pump.fun generates huge revenue, most users see minimal gains or losses.

Only 0.6% of wallets earn over $10,000, and just 1% of tokens graduate. The odds of lasting success are tiny.

Based on the data, the platform is more of a speculative frenzy than a profitable venture.