Pump.Fun’s removal of $2 issuance charge pushes daily fees to all-time highs, leaving users unhappy.
In a staggering display of cryptocurrency’s unpredictable nature, Pump.Fun, a Solana-based token generator, has set a lifetime record by generating an astonishing $5.3 million in fees over the past 24 hours. This remarkable achievement surpasses not only other platforms but also entire blockchains like Ethereum, Tron, and Solana itself.
The Reason Behind the Explosive Growth
In a bid to revamp its token creation process, Pump.Fun recently eliminated the $2 fee for token creation. However, this decision led to an unexpected outcome: shifting the cost burden to the first buyer of the token. This change sparked an explosion in token creation, leading to complaints from market watchers.
Pump.Fun’s Rise to Prominence
Token generator Pump.Fun has become the highest-grossing platform in the crypto market, leaving behind more prominent protocols and even entire blockchains. According to data tracked by DefiLlama, Pump.Fun raked in $5.3 million in daily fees, a lifetime record. In contrast, Ethereum’s staking application Lido came in second with a relatively smaller fee of $2.3 million.
Blockchains Fall Behind
Even the major blockchains failed to match Pump.Fun’s impressive feat. According to DefiLlama data, Ethereum, Tron, and Solana made less than $1.3 million each in fees over the same period.
The Mechanics of Pump.Fun
So, what makes Pump.Fun so lucrative? The platform allows anyone to issue a token for around $2 worth of Solana’s SOL in capital. Users can then choose the number of tokens, theme, and even upload a meme picture to go along with it. When the market capitalization of any token reaches $69,000, a portion of liquidity is deposited to the Solana-based exchange Raydium and burned.
The Impact of Eliminating Fees
Developers dropped the $2 issuance fee earlier this week, sparking an explosion in creators taking advantage of the new system. As of Wednesday, the fee is now paid by the first buyer – usually trading bots or an automated service – of any token created on Pump.Fun. The creator also receives 0.5 SOL if the coin completes its bonding curve and is listed on Raydium.
The Consequences
Over 10,000 tokens were created in a single three-hour period on Tuesday, propelling Pump.Fun’s revenues to $5 million from under $900,000 on Monday and Tuesday. This drastic increase came after the creator fees were dropped.
Market watchers, however, expressed dismay at the decision:
- "Nobody is having fun anymore besides the pump fun team raking in fees," said @anon_rip in an X post.
- "How is this a good thing anymore?"
- Not entertaining watching things go to zero in seconds," said @Vertwashere, referring to the brisk creation of new tokens that plunge in value after initial buying activity in the first few minutes.
- Nobody is entertained but ur team and your pockets," @CookerFlips, another X user, said.
The Future of Pump.Fun
As CoinDesk previously reported, Pump’s quick token creation means tens of thousands of tokens have likely been issued since its March launch. However, only a few have reached more than $10 million in market capitalization. The success of Pump.Fun has raised questions about the sustainability and impact of such platforms on the crypto market.
The Bottom Line
Pump.Fun’s remarkable achievement serves as a testament to the unpredictable nature of cryptocurrency. As the platform continues to rake in fees, it remains to be seen whether its dominance will last or if other players will emerge to challenge its position.
