Behind the PumpFun Token Issuance Frenzy: Who is Retreating? Who is Catching a Falling Knife? Nearly 60% of the presale participants have sold or transferred their tokens.

In the past week, the ICO coin issuance activity that has drawn the most attention in the market is none other than the PumpFun project. This major coin issuance event began in June and continued to ferment amid anticipation and complaints, until July 12, when the coin was finally issued. Despite ongoing doubts about its valuation of 4 billion dollars, the data clearly shows that investors voted with their feet, as the public sale was quickly sold out in 12 minutes.

Today (18th) in the European morning session, the price of PUMP token has retraced, currently reported at 0.004640 US dollars.

(Source: Trading View)

So far, PumpFun has delivered a relatively satisfactory answer. After going live, the price has been steadily rising, and PumpFun has also achieved its first token buyback through transaction fees. However, data shows that nearly 60% of the presale participants in PumpFun's Initial Coin Offering (ICO) have sold or transferred their tokens to centralized exchanges (CEX) or other wallets. This has raised questions in the market: who is retreating behind this coin issuance frenzy? Who is taking over?

PumpFun: The "Printing Machine" and "King of Applications" in the Meme Coin Market

Speaking of the king of applications in this round of bull market, PumpFun, even if not in the first place, is still ranked among the top. It is no exaggeration to say that the emergence of PumpFun has successfully brought MEME to a new height. Its concept of fair launch and convenient operation completely breaks the high threshold of traditional issuance models. With just 3 dollars, one can create a token, which remains highly attractive even in the current downturn of MEME.

From a mechanism perspective, there are no pre-sales or private placements, with pricing determined entirely by smart contracts. There is even a graduation mechanism, which automatically creates a liquidity pool on DEX once the market capitalization reaches $69,000. This fully automated coin listing process is highly popular in the market, making PumpFun the strongest money printer in this round of the market.

Since its launch in January 2024, PumpFun has issued a total of 11.44 million tokens, with over 22 million active addresses. It has achieved cumulative revenue of nearly $720 million, with the highest single-day transaction fee reaching as much as $5.43 million, and a peak daily income hitting a staggering $15.88 million. It can be regarded that the market bonus of this round of MEME has all been captured by PumpFun, further driving the development of the Solana ecosystem.

Questions Behind the Coin Issuance Frenzy: $4 Billion Valuation and Market Contraction

It is precisely such a project that started with MEME that suddenly plans to issue coin, triggering widespread discussions in the market. The rumors of PumpFun issuing coin began in February this year, when Wu revealed that PumpFun planned to issue coin on a centralized exchange and even prepared complete issuing documents. However, this was later abandoned due to the liquidity crisis caused by the frequent MEMEs from the Trump family. In June, the rumors of issuing coin resurfaced. Blockworks cited several insiders reporting that PumpFun plans to raise 1 billion dollars through a token sale, with a valuation reaching 4 billion dollars, and the tokens will be sold to both public and private investors.

On July 10, PumpFun finally released the news, announcing that the public sale of the native token PUMP will officially start on July 12, 2025, at 22:00. A total of 150 billion tokens will be sold at a unit price of 0.004 USDT, accounting for 15% of the total supply (1 trillion tokens). With a valuation of 4 billion USD, it aims to raise 600 million USD. Due to compliance reasons, participants from the UK and the US are not allowed to participate in this sale. In the PUMP tokenomics, 33% is allocated for public sale, 24% for community and ecological incentives, 20% for the fund distribution to existing investors, 2.4% for the ecological fund, 2% belongs to the foundation, 13% is allocated to existing investors, 3% for live streaming related activities, and 2.6% for liquidity and exchanges.

However, compared to the previous expectations of issuing coins, when it really came to issuing coins, the market collectively sang its praises. The controversy focused on the $4 billion valuation. It's worth noting that the previous stablecoin IPO Circle, which rang the bell in New York, had a valuation of only $7 billion. If the regular military is like this, a blockchain casino claims to be worth $4 billion, even surpassing the valuation of most blue-chip DeFi protocols today, leading the market to say that liquidity is overdrawn.

More importantly, the present is different from the past. From the market perspective, looking at today’s crypto space, aside from the recent surge, most altcoins and MEME coins are experiencing a downtrend. This can be clearly seen from the trading volume; according to Dune's data, after reaching a peak trading volume of 5.44 million dollars on January 23, 2025, PumpFun's trading volume has shown a drastic decline trend, with recent daily trading volume stabilizing below 700,000 dollars, representing a drop of 87.2% from its peak. In terms of token creation, daily token creation has dropped from a peak of 70,000 to 30,000, almost halving. The graduation rate of tokens is astonishingly low; in 2024, there was a graduation rate of 1.6%, but now, the graduation rate has fallen to below 1%.

It is evident that the beneficial effects are weakening, and the MEME market is returning to "cold", with users' enthusiasm rapidly fading. However, no matter how impressive PumpFun is, it is merely a tool that needs to rely on the heat of the MEME market, which has also raised doubts about its valuation.

Rise of Competitors: The Threat of LetsBonk

On the other hand, the market is shrinking, while competitors are rising. PumpFun, which once had no rivals in the market, has recently encountered pressure. Recently, the competitor LetsBonk, centered around BONK, has been developing rapidly, frequently occupying the top position in the number of tokens issued, surpassing PumpFun to take the number one market share. Although PumpFun has quickly retaliated, the competition between the two remains fierce, and it cannot be denied that the position of PumpFun's Long Yi is threatened.

According to on-chain data, as of July 7th, LetsBonk has surpassed PumpFun in several key indicators, including market share and protocol revenue. The number of issued coins and user activity levels are also significantly ahead of PumpFun.

This overtaking on the curve is not accidental. Compared to the long-term high commission and high centralization mechanism of PumpFun, LetsBonk has chosen a completely different route: 50% of the platform's transaction fees will be used for the repurchase and destruction of BONK tokens, and another 8% will be allocated for strategic reserves and community incentives. In terms of income structure, it clearly binds the interests of users and developers, allowing every creator to become a beneficiary of the platform's growth.

Who is retreating? Who is taking over?

From the final results, although industry professionals are not optimistic, supporters and institutions clearly do not share the same view. In terms of public sale, in just 12 minutes, the PUMP token completed a public sale quota of 500 million USD, with six major exchanges including Gate participating in the PUMP public sale. According to Dune panel data, the number of wallet addresses that participated in the PumpFun official website presale and completed KYC was 23,959, while the number of wallet addresses that successfully purchased was 10,145, with an average subscription amount of 44,209 USD. A total of 89.7% of PUMP token presales were completed through the official website, while the total amount sold on various CEXs accounted for only 10.3%. Among the presale addresses on the official website, small users are the main group, with 5,758 users subscribing for PUMP under 1,000 USD, while the number of addresses with subscriptions exceeding one million USD was 202, indicating the enthusiasm of institutions.

However, data shows that in the PumpFun initial coin offering, nearly 60% of presale participants have sold or transferred their coins to centralized exchanges (CEX) or other wallets. Specifically, among 10,145 participants, 6,042 wallets (59.6%) have sold or transferred coins, 3,791 wallets (37.4%) continue to hold, and 312 wallets (3%) increased their holdings after a week.

From the current perspective, it seems that the latter has temporarily gained victory. After GMGN was launched on July 15, PUMP briefly fell from $0.0065 to $0.0042, but after some fluctuations, it began to rise, currently reported at $0.0066, which is a 55% increase compared to the fundraising price of $0.004. The FDV price has also risen from $4 billion to $6.6 billion, bringing a certain wealth effect to the investors.

Of course, this part of the increase also has an element of performance. According to on-chain analysis by Ember (@EmberCN), after issuing the coin, PumpFun started to use the transaction fee income to repurchase PUMP, transferring the transaction fee income of 187,770 SOL to the 3vkp...3WTi address, purchasing PUMP and then transferring the acquired tokens to the G8Cc...kqjm address for storage. Currently, 111,953 SOL (approximately 1.83 million USD) has been used to purchase 3.04 billion PUMP, with an average price of 0.006 USD. The repurchase can support the price, but it also raises suspicions of a left hand to right hand transfer. Of course, for holders, no matter the purpose, as long as the price rises, it is ultimately a good thing.

Some whales have begun to take profits. According to Lookonchain's monitoring, a whale 8a5nSU spent 5 million USDC through 5 wallets to participate in the PUMP public sale, purchasing 1.25 billion PUMP. Today, it sold all at an average price of $0.0067, with a profit of $3.416 million.

The Future of the Meme Coin Market: Polarization and the End of the Narrative?

Whether exiting liquidity or simply building for the benefit, the valuation controversy of this PumpFun reflects the current market situation. The MEME, once known for its liquidity, is collectively falling into difficulties, and the once-booming attention economy seems to be gradually becoming a false proposition. Now, even the most representative applications must embark on the path of issuing coins, subtly revealing signals of a narrative's conclusion. Ultimately, where MEME will head is marked by the token PUMP, and the market's bets on it will serve as an effective observation of the market's judgment on the value of the attention economy. A rise in the token at least indicates market recognition of its pricing, while a fall in the token leads the public to ponder the true essence of the MEME market, likely generating more selling sentiment. This might also be one of the reasons PumpFun has chosen to initiate buybacks.

In the long run, even though the current market uncertainty is somewhat strong, a foreseeable interest rate cut is already on the way, and the altcoin market may also be poised to welcome a small climax. MEME, on the other hand, reflects more of a polarized trend, with quality MEME rising due to sector rotation, while the remaining MEME liquidity is being siphoned off, resulting in most of them becoming neglected. If this path continues, MEME, which is similar in nature to the lipstick economy and lottery economy, will always exist, but it will be difficult to stir up a money tide like in 2024 in the market.

Conclusion:

Returning to the question in the title, who benefited from PumpFun issuing coins? Undoubtedly, the project team made profits, and participants in the public sale and private placement also seem to have made gains at this point. Short-term investors who went long have also profited, but how long they can continue to earn, and to what extent the project team can maintain the coin price, remains a big question mark.