Bitrabo Editorial
The craze around memecoins on various blockchains has a new contender in Pump.fun, a Solana-based marketplace likened to the Ethereum platform 4chan.
Over One Million Memecoins Generated in 7 Months
Since its inception in January 2024, Pump.fun has seen the birth of over a million memecoins on Solana and Blast blockchains. It has become the top choice for retail investors to create and exchange these tokens. However, concerns have been raised about the platform promoting crypto as a “gambling arena” due to issues like “pump-and-dump” schemes.
Pump.fun has caught the eye of retail investors and notable figures such as rapper Iggy Azalea, who introduced her token Mother Iggy (MOTHER) on the platform. Despite its popularity, some argue that Pump.fun reinforces the view of crypto as a “speculative casino,” diverting focus from its true technological potential. Critics also point out that these tokens often lack utility beyond their meme status, potentially harming the credibility of the crypto industry as a whole.
SEC’s Crackdown Influencing Memecoin Preference?
Rachel Lin, CEO of SynFutures, notes a growing interest among retail investors in memecoins. This shift may stem from disillusionment with traditional venture-backed token investments, with memecoins viewed as transparent and offering high returns in comparison. The SEC’s recent actions in regulating crypto markets could also be driving investors towards memecoins.
Michael Selig, a partner at Willkie Farr & Gallagher LLP, explains that memecoins serve different purposes than securities, attracting investors looking to express opinions, engage in communities, speculate on trends, or simply for entertainment.
Pump.fun Highlights
Pump.fun’s goal is to provide a swift and cost-effective way for anyone to create memecoins while reducing risks like rug pulls. Users can share humorous content with friends by giving them a stake in the meme’s success. Through an automated process, users can upload memes or JPEGs, along with a token name and ticker, leading to instant token creation for a nominal fee of under $2.
The platform utilizes a pricing model where memecoin prices increase as more users buy in. New tokens are launched through a fair process, issuing all tokens at once without presales, often at a fraction of a cent.
Currently, the Solana price remains at $138, showing stability from the previous day. The token has been trading between $131 and $144 over the past week.
Image source: DALL-E, chart from TradingView.com