A complete guide to pump.fun and why it exists

The norm for most crypto cycles is that the memecoin season often makes a brief, playful appearance before fading away like a ghosting ex, only to reappear when the market gets exuberant again.

Yet, it’s undisputable that memecoins were genuinely fun in these past cycles. The shared sentiment around this period is precisely why the phrase "God’s greatest casino" is now synonymous with memecoin season in the crypto space.

However, memecoins were quite different back then compared to now.

Launches used to take the form of not-so-random dev deployments, sporadic time-bound or capped public sales, cabalized insider presales, stealth launches, etc.

Given how these coins entered the market, it's easy to see why they were so seasonal. Once retail caught on to the nuances of a particular launch style, causing it to lose profitability or for the hype to die down, a new type of launch would emerge— and this cycle would continue until the season gradually faded away.

Since memecoins were essentially culture coins created without any responsibility or utility, their launch patterns were filled with complexities. For example, presale launches were often riddled with insider activity, while stealth launches were prone to developer rug pulls just seconds after going live.

Additionally, if you had searched for “how to create a memecoin on Ethereum or Solana” last year or in previous cycles, you would have been told that coding skills were essential, along with facing relatively high costs to successfully launch your token.

This was true. Not everyone could launch tokens, and ‘devs,’ in the real sense of the word, were highly sought after.

It is based on these fault lines that pump.fun decided to build a much easier and transparent environment for memecoin launches.

But before we delve into what pump.fun is, let’s look into the attributes of the cycle in which it came to be.

What is the memecoin supercycle?

As we mentioned earlier, the current memecoin cycle is a lot different than the preceding ones. In fact, the current cycle is tagged a memecoin supercycle for a number of reasons.

Part of the reason it’s seen as a supercycle is the level of innovation and attention that’s been shipped and captured in this cycle.

For example, in previous cycles, we saw some innovation in the memecoin space, such as the emergence of memecoin crowdfunding apps and platforms. However, in the current memecoin supercycle, the innovations have been far more advanced.

For instance, trading bots have become popular, allowing users to bypass the complexity of using DEXs, and platforms such as BubbleMaps for tracking holder ratios have also improved significantly.

In terms of attention, Solana remains at the forefront of this cycle, not only capturing the mindshare of natives but also the attention of many popular figures who have proceeded to launch their own memecoins on the network.

To fully grasp this cycle's magnitude of attention, we recommend checking out our article on the celebrity memecoin mania on Solana.

What is pump.fun?

Pump.fun is undoubtedly the most important innovation of the supercycle so far.

Pump.fun is an on-chain app created to enable anyone, regardless of experience, to launch a memecoin in less than 2 minutes with as little as $2 (now free), significantly lowering the cost of creating a memecoin and also eliminating the technical barrier to entry.

How does Pump.fun work?

Pump.fun doesn’t just allow users to launch memecoins without seeding liquidity at the cost of two dollars. It also serves as a fair launch platform where users can buy into memecoins before they are available on DEX pools.

It goes beyond this to employ a bonding curve mechanism. This mathematical curve allows users to buy or sell tokens at prices determined by the curve rather than by traditional supply and demand on DEXs.

The price is determined dynamically along a curve as traders buy and sell. The result? A coin can be created without any initial liquidity being seeded, enabling a truly fair launch.

Additionally, the liquidity is locked away from the dev, eliminating the possibility of rug pulls or liquidity drains. This setup allows users to participate freely in launches and gain or lose as the price moves up or down the curve.

Currently, the zenith for the bonding curve for launches on pump.fun is set at 69k market cap. Once this threshold is hit or surpassed, a pool will be automatically created on Raydium, with $12k in liquidity added to the pool and burned, allowing the price of the coin to operate outside the confines of the bonding curve.

Also, once a coin hits the bonding curve, pump.fun charges a fee of 2 SOL.

However, pump.fun has recently introduced a new update allowing users to create a coin for free.

This is how pump.fun will work thanks to this new update

• The first buyer of the coin pays the $2 fee rather than the creator. Due to this update, creators can make a coin without buying the supply.

• Creators will receive 0.5 SOL (~$80) if the coin completes its bonding curve. This will be paid from the pump.fun migration fee, which is now only 1.5 SOL, and will be paid even if the dev never held the coin created, sold, or is still holding the coin. The idea is that this structure will incentivize devs to “work for their bags,” thereby reducing low-quality launches.

Additionally, pump.fun’s new structure means that new coins created will not be live on the mainnet until there is a buyer. If the dev buys before hitting the create button, it goes live immediately.

How to launch a memecoin on pump.fun

Unlike before, when there’s a need for a dev that can write smart contract codes either in Solidity, if Ethereum, or Rust, if Solana, users don’t need to be skilled in any form of coding to launch a memecoin using pump.fun.

Additionally, in line with the new development update, users no longer need $2 to launch a memecoin using pump.fun — they can do so for FREE.

Here’s how to launch a memecoin on pump.fun in a few steps.

• Go to https://pump.fun
• Click on “[I’m ready to pump]”

• Connect your Solana wallet (preferably Phantom wallet)

• Proceed to set up your profile (you can also choose to be anonymous)

• Click [Start a new coin] to launch your memecoin

• Fill in the details of your new coin as seen below

• Choose to buy a portion of your memecoin supply or not.
• If you choose to buy, insert an amount you intend to buy and click on “create coin.”
• Make sure you have enough SOL to pay the gas fees.

• Voila! Your memecoin has been created, and you’re ready to go!

[Disclaimer: The memecoin created is purely for the purpose of this illustration and may or may not exist in real life.]

How to buy shitcoins on pump.fun

Apart from creating coins using pump.fun, you can also buy and sell early launches simply by monitoring the “terminal” to see what’s being launched and deciding if it interests you enough to buy.

You can also purchase a pump.fun shitcoin by copying and pasting the contract address into your preferred Telegram or web app bot for quicker purchases.

• Go to the terminal and set it to your preference
• Click on the coin you want to purchase

• Fill in the amount you wish to purchase and click on “place trade”
• Proceed to confirm the transaction from your wallet

N/B: The memecoin that appears at the top of the homepage is the current “King of the Hill” (KOTH). A coin reaches KOTH status when the market cap touches 30k.

However, if the current KOTH keeps pumping towards the top of the bonding curve, it will stay on the homepage until a new KOTH emerges.

Why is pump.fun successful?

As of the time of writing, over 1.7 million coins have been deployed through pump.fun — a world record for coins launched via a model and source, if you’re wondering.

The chart for launches on pump.fun has also been on the uptrend and quite recently had one of its biggest launch days, with over 10,000 coins launched in just 3 hours.

Another metric that proves how successful pump.fun has become since its inception is the fact that it is currently generating more revenue per 24 hours than the network where it is natively built, Solana. Impressive, right?

A key factor behind pump.fun’s success is its ability to bridge the gap between the high-risk appetite of degenerate gamblers and the ease with which they can actually engage in such activities.

Also, as we mentioned in the first paragraphs above, pump.fun can be said to have been able to solve the issues with the seasonality of the memecoin season, creating an avenue for fair launches devoid of insider nuances at the core, and as such, attracting retail in mindblowing magnitude.

Another factor is that pump.fun taps into what is arguably crypto’s strongest use case: gambling and speculative markets. This is also a compelling explanation for the success Polymarket has achieved in recent months.

However, despite the relative success of pump.fun, there are arguments that it has done more harm than good to memecoins and the entire crypto market, and there are some interesting arguments around this.

Is pump.fun bad for crypto?

It’s no secret that the driving force behind this memecoin supercycle is pump.fun. The platform has enabled a flood of meme tokens to be launched rapidly, though only a few have managed to perform well amidst the horde of

new tokens launched.

An interesting statistic to consider is this: out of more than 1.7 million tokens launched through pump.fun, only 41 have maintained a market cap of over a million dollars for weeks.

This underscores the likelihood that the platform serves primarily as a launchpad for low-attention, low-volume tokens.

And if you thought it would get better, you’re wrong because only 15 tokens launched through the platform have been able to maintain a market cap of, at, or above 10 million dollars for weeks.

However, when things are viewed from the perspective of the number of tokens launched and the amount of volume accrued by these numbers, irrespective of their performance, it is easy to see why memecoins have continued to maintain a lion’s bite of mindshare amongst natives, leaving other sectors of the industry in drought.

There’s a noticeable disconnect between sentiment and performance when it comes to pump.fun. Typically, when public sentiment around an app is low, it directly impacts its revenue performance.

However, this isn’t the case for Pump.fun, as shown below.

Although there might be a direct correlation between pump.fun’s strength as a product, its role in turbocharging the memecoin supercycle, and the performance of other alt assets—especially utility tokens—there is no definitive proof that it is the sole cause of the poor performance of alt assets.

blocmates’ thoughts on pump.fun

While there have been a lot of complaints about the medium-term effects of pump.fun, the amount of forks and lookalike products such as Sunpump on Tron,  Gmon.fun on Monad, Hop.fun on Sui —that have emerged on other network chains tell another story.

What it does demonstrate, however, is the growing acceptance and a silent consensus that pump.fun is a market leader in the quick-launch token platform category. This category doesn’t appear to be fading anytime soon.

Moreover, with the recent update on coin creation, there’s a growing belief that sporadic launches will decrease over time as creators come to understand that it actually requires significant effort to push a token beyond the bonding curve.

Attention in the memecoin sector is highly fragmented, and the metrics for coins making it to Raydium are increasingly trending downward. As a result, launching a meme coin randomly without a well-thought-out plan becomes a net negative.

Finally, regarding the debate over whether pump.fun is a catalyst for "God’s greatest casino" or “crypto’s kryptonite,” it’s far more important to see it from the perspective that pump.fun has, in fact, effectively highlighted the shortcomings of existing utility tokens.

And more importantly, other potential factors, such as overvaluation and unsustainable tokenomics should be investigated as more suspicious culprits.