Source: Gryphsis Academy
Introduction
Bitcoin’s value foundation in the inability to increase supply, Ethereum’s triggering of the ICO craze through smart contracts, and Memecoin’s and Memecoin’s attraction of massive funds due to fair distribution have defined the value of cryptocurrencies. The turnover of new technologies continues to expand the audience for encrypted applications; while the differences in emerging token issuance mechanisms further reflect changes in audience investment values.
Unlike traditional meme coins like $DOGE, $SHIB, and $FLOKI, which attempt to combine practical applications, the memecoin market has presented a new format under the leadership of $BOME and $SLERF since the beginning of this year. From issuance to trading, many innovative applications worth noting have emerged around the memecoin ecosystem.
PUMP.FUN is a decentralized Memecoin issuance platform where users only need to provide creativity to easily create their own Memecoin on the platform at a very low cost (0.02 sol); users can also participate in tokens issued by others and witness the process of a Memecoin becoming popular from scratch.
As a phenomenon-level performance application in the market, PUMP.FUN has research value and deserves further discussion. The PUMP.FUN Dune dashboard can explain the new format of the market track in terms of platform, user, product behavior, activity, growth trends, etc., and is worth long-term tracking.
PUMP.FUN Overview
To start, PUMP.FUN and FRIEND.TECH, which went online last year, have shown very similar market performances. Initially attracting attention in the on-chain Degen player circle, both quickly gained a high market share as industry pioneers, with real users and protocol revenue increasing daily. The design of the two platforms is similar but with some differences in asset issuance, both using the PAMM (Primary Automated Market Makers) mechanism to provide convenience to users, but their assets and specific pricing curves are different.
For example, in PUMP.FUN (and similarly in FRIEND.TECH), PAMM is divided into two mechanisms: Fund-to-Mint and Burn-to-Withdraw. The former allows users to deposit their $SOL into the PAMM smart contract reserve pool. The smart contract reserve pool mints an appropriate amount of Memecoin based on the current pricing reported by the Bonding Curve and sends it to the user; the latter allows users to complete withdrawals by selling Memecoin to the PAMM smart contract.
Unlike the Memecoin on PUMP.FUN, FRIEND.TECH tokens have integer mint and theoretical “infinite issuance” (social relationship building) characteristics. Additionally, FRIEND.TECH assets represent tokens for user social accounts, while PUMP.FUN is for user-issued Memecoin.
The two projects have very different market entry strategies and subsequent tactics. FRIEND.TECH, backed by top crypto institution Paradigm, uses the Pointsfi user incentive measures adopted by NFT market Blur and Ethereum Layer 2 network Blast to help FRIEND.TECH retain users; FRIEND.TECH V2’s airdrop tokens and Club Key gameplay triggered a new round of market hype. Meanwhile, PUMP.FUN adheres to the egalitarian fair launch of Memecoin, with a low profile in expanding platform functionality, even without announcing any token plans despite making tens of thousands of dollars a day.
For more in-depth analysis of FRIEND.TECH, refer to the past webinar: Friend Tech – Gryphsis Academy webinar.
PUMP.FUN Bonding Curve and Product
Since the project contract is not open source, the products introduced by PUMP.FUN have only disclosed gameplay and fees. The official mechanism and product details have not been mentioned. In the research process, a product model must be constructed, and data must be compared and verified. Specifically, the study of the PUMP.FUN Bonding Curve is as follows:
Product Model Construction
Compared to other memecoin tokens, Memecoin is designed around community consensus and group trading emotions, with a generally large total token supply and full circulation, which can be combined with various promotional strategies. The initial price is not set too high, and the early price curve is steep, attracting funds into the market.
PUMP.FUN Product:
Users come up with a good idea, choose a Ticker on PUMP.FUN, and create a new Memecoin with just one click.
Other users on the platform continuously buy and sell Memecoin tokens on the pricing curve.
PUMP.FUN then sends the newly created Memecoin to Raydium.
The new Memecoin further gains popularity, and users can trade a new Memecoin created by PUMP.FUN users, funded by other PUMP.FUN users, with a total supply of 1 billion tokens and an initial market value of $69k (410 $SOL) on Raydium.
Users only need to come up with a Ticker, upload an image, write a description, and with a small fee, they can easily create Memecoin. Other users can comment below, and the message board feature set by PUMP.FUN also provides convenience for the Memecoin community. By clicking on the user’s address, the platform can display the tokens created/owned by the user and the objects they follow.
Other users can trade this token, and once the fundraising limit is reached, the tokens will be sent to Raydium.
Pricing Curve
Unlike the FRIEND.TECH pricing system, which only accepts integer inputs and outputs, the token pricing system on PUMP.FUN is a smooth curve. Unlike FRIEND.TECH’s theoretically infinite issuance, all Memecoin on PUMP.FUN share the same economic model, with a constant token supply. Users mint some tokens at a reasonable price on the Bonding Curve, and the remaining tokens form an LP pool with raised funds.
By analyzing the front-end code, a function call named virtualSolReserves was obtained. The PUMP.FUN pricing system has a pre-virtual pool with x0 $SOL and y0 tokens. By collecting data on the $SOL amounts bought by platform users and the corresponding token data and fitting them to the formula x*y=k, the pre-virtual pool was found to be 30 $SOL and 1073000191 tokens, with an initial k value of 32190005730, and the price of each token was 0.000000028 $SOL.
The joint curve pricing function is y=1073000191 – 32190005730/(30+x), where x is the $SOL amount bought, and y is the corresponding token quantity. The derivative yields the price of each token.
Case Study Analysis
Users raise a total of 85 $SOL in fundraising and receive 8 billion Memecoin tokens, which align with reality.
The fundraising of 79 $SOL (with 6 $SOL as a listing fee) and an additional 2 billion tokens added as initial liquidity for the trading pool, sent to Raydium, results in a total token supply of 10 billion, matching reality.
Upon listing on Raydium, the price of each token reaches 0.00000041 $SOL, 14.64 times the initial virtual pool price, in line with reality.
In conclusion, PUMP.FUN charges a 1% platform trading fee before listing on Raydium and a listing fee of 6 $SOL during the listing process.
Why Focus on PUMP.FUN
Why Focus on Meme
For those outside the crypto world, Bitcoin’s speculative value is solely based on meme attributes in spreading success; similarly, $UNI in the Ethereum ecosystem lacked any empowerment before the voting mechanism, with investment logic based solely on industry recognition and consensus on spreading the crypto spirit.
After the Meme Season, the Summer of Glyphs, and the online money-making frenzy of Memecoin Pre-sale in the crypto world, users have developed a unique understanding of Memecoin, despite its lack of utility. The lack of mainstream narratives, mismatched funds in the time dimension, and the continuous pursuit of fair launches by crypto users investing in Memecoin have strengthened the reflexivity of the Memecoin market.
Why focus on Meme? As mentioned earlier, “memes spread through imitation; any information that can be replicated through imitation can be called a meme.” As inherently repetitive beings, humans spread memes as a result of the evolving genetic collection seeking order in chaos.
In addition to the wealth effect of the Memecoin track, many crypto assets themselves have meme attributes. Whether it’s Bitcoin, which has built the foundation of value in the crypto world, or decentralized tokens issued through smart contracts, or memecoin celebrity coins based on simple logic.
PUMP.FUN Operational Data
The Memecoin and Memecoin transactions handled by PUMP.FUN users and platforms, after being validated by market logic, lead to a mimicry effect, amplifying trading volume. All token information is labeled on PUMP.FUN, and the process of repeatedly mentioning hot events has brought enormous profits to the platform.
After verification and construction of the Dune dashboard, we believe that the enlarged data results can explain most of the phenomena of the new Memecoin business format established by PUMP.FUN. The Dune data dashboard includes platform users, platform revenue, token creation status, high-frequency trading activities, and can analyze the platform, user, product behavior, activity, and growth trends from a data perspective. Dune Dashboard Website: PUMP.FUN by Gryphsis Academy.
Platform Revenue
According to the Dune data dashboard, PUMP.FUN experienced its first wave of growth in mid-March. As a player who did not occupy the ecological position earliest, users were gradually accepted during this time. Several Memecoin selected by the platform also created many wealth stories. On March 26, $SC, which went online, quickly reached a market value of over 100 million. Other Memecoin created by users also had varying degrees of wealth effect due to being in the initial stage. The platform’s daily revenue reached 1000 $SOL and continued to grow.
PUMP.FUN experienced an explosive period from April to early May. $michi, which went online on April 8, broke through the 200 million market value, igniting market sentiment. Memecoin narratives switched quickly, and mimicry continued to emerge, with thousands of Memecoin created and traded daily, from national coins from the Summer Olympics to religious coins, and even Trump concept coins. The platform’s daily revenue averaged over 2000 $SOL.
From mid-May to the end of May, while GME stocks surged on May 13, Memecoin created by users on PUMP.FUN also set revenue records for the platform, reaching $1.2 million. After a brief decline in popularity following an attack by a former employee, PUMP.FUN experienced further breakthroughs after breaking the circle with Memecoin created by celebrities, bringing platform revenue back up to $1 million. After breaking the circle, the average daily revenue rose to $700,000, and the platform’s total revenue reached nearly $37 million.
On May 16, due to the theft of the wallet account permissions for creating trading pairs on the PUMP.FUN platform by a former employee, a significant amount of Memecoin that completed fundraising could not be listed on Raydium, resulting in a loss of $2 million for users. PUMP.FUN took measures to reduce platform income to compensate for users.
User Growth
According to the Dune data, the number of PUMP.FUN users is still on the rise, with occasional setbacks but without a decrease in platform popularity. Before April 16, the number of new users on the platform increased daily, gathering nearly 35,000 active users in a month, gradually laying the foundation for subsequent retention of user habits by the platform’s products.
From late April to May, the daily number of new users on the platform slowed down. After the celebrity effect broke the circle, the number of active users on the platform peaked at 64,378 on May 30, with daily new user numbers continuing to slow down. The platform is likely to face its first user growth bottleneck.
Memecoin Products
If every user’s Memecoin and transactions are validated by market logic, they will show a mimicry effect, continuously amplifying trading volume. All token information is labeled on PUMP.FUN, and the repeated mention of hot events has brought huge profits to the platform.
Verified and constructed Dune dashboard data and comparisons show that the enlarged data results can explain most of the phenomena of the new Memecoin business format established by PUMP.FUN. The Dune data dashboard includes platform users, platform revenue, token creation status, and high-frequency trading activities, allowing for analysis of the platform, user behavior, activity, growth trends, and more. Dune Dashboard Website: PUMP.FUN by Gryphsis Academy.The Memecoin involved in the issuance and trading on the UN platform is considered a platform product. The data related to platform products can reflect user behavior, making it easier to improve corresponding issues.
The number of Memecoins created on PUMP.FUN varies with the number of active users. Since the platform’s launch, a total of 862,988 Memecoins have been created, with an average of 15,000 new Memecoins added daily since May.
Out of these, only 10,707 can be launched on Raydium for broader trading. This indicates that the platform’s revenue mainly relies on transaction fees, with token creation and listing fees accounting for a smaller portion.
Currently, PUMP.FUN has not disclosed financing information, and the platform is still in its growth phase. Data from Dune shows a high frequency of trading activity addresses, raising the possibility of volume manipulation.
The platform has also introduced live streaming functionality to showcase the issuance and operation of emerging Memecoins through live broadcasts and videos, providing a suitable way to break the traffic and funding loop.
PUMP.FUN has partnered with @bubblemaps to generate trading-related bubbles that allow users to view the associated wallets of token holders and whether they may be targeted by Dev’s burning token wallets, reducing the risk of rugs. The effectiveness of the new platform features still needs to be validated through data, and the changing narratives of Memecoins and the introduction of new features reflect the team’s ability to adjust in a timely manner.
Overall, after its launch, PUMP.FUN ignited the market without institutional endorsements, meeting user demands through the Bonding Curve mechanism. The platform also leverages the wealth effect brought about by user-issued Memecoins for user acquisition and promotion.
Subsequent changes in the Meme narrative were swift, and the severe user-to-user trading phenomenon did not structurally affect data growth but continued to break the loop due to several hot events. With potential competition from external platforms, growth bottlenecks may arise, but for applications occupying advantageous ecological positions, there are many choices to be made.
Comparative Analysis
Compared to other Memecoin Launchpad competitors, PUMP.FUN is better able to build Memecoins based on the underlying value of community consensus and group trading sentiment. As of the completion date of this article on June 6, PUMP.FUN has 16 tokens with a market value exceeding $3 million, with the $SC token having the highest market value of $300 million.
PUMP.FUN’s outstanding performance compared to the weaknesses of other competitors can be attributed to product quality and the ecosystem backing it.
Unlike other competitors that provide users with a sense of calm and static, visiting the PUMP.FUN website immediately presents users with dynamic visuals and high saturation design that stimulate user senses, evoking emotions akin to the frenzy and magic of Memecoin trading. The gameplay introduction is concise and fits the characteristics of Memecoin traders who prefer quick transactions, while detailed information on tokens is provided on other pages to help new buyers form community consensus. The platform’s logo, a green pill, seems to convey a healing pill that is addictive, leaving users unable to resist.
Unlike PUMP.FUN, which is backed by the Solana ecosystem, meme.market / werich_ / rugdotfun / Momentum_v1 are developed on the Base chain, where attention and funds are diverted to FRIEND.TECH and Farcaster. Memecoin, through the Socialfi platform on the Base chain, has resolved the cold start problem, and the $DEGEN and $Friend token market values are substantial, offering other Memecoin platforms room for imagination. The Memecoin Launchpad track on the Base chain has users accustomed to the echo walls constructed by FRIEND.TECH and Farcaster through a social model, with funds and traffic being fully divided.
During the attack period on PUMP.FUN, DEGEN.FUND launched on Solana, but similar Bonding Curve mechanisms and attempts to attract the market with lower platform fees did not sustainably generate enough scale, and the $IYKYK token, as a flagship speculative target, returned to normal after short-term speculation by on-chain players.
How to Participate in PUMP.FUN
For this new niche field of Memecoin Launchpad, PUMP.FUN should be the focus of investment research and deep participation. The platform’s users can be divided into three roles: Memecoin Creator, Memecoin Trader, and Memecoin Opportunist. Users can move between roles, each offering different opportunities when faced with the same Memecoin.
Memecoin Creator can be a crypto artist, an early evangelist of Memecoin narratives, a project leveraging the platform for promotion, or even a celebrity post-breakout. As the role responsible for releasing/discovering new Memecoins worth trading, they need to have a certain level of knowledge in communication and influence.
A good Memecoin Dev can work with social media to identify strong Tickers for the market. Even a Dev who is not very sensitive to the market can benefit from PUMP.FUN in reducing trial and error costs. For individuals like Caitlyn Jenner and Iggy Azalea with special identities, decentralized issuance platforms like PUMP.FUN can provide enough funding and traffic support for their tokens in a short amount of time.
Crypto-native crypto artists and Memecoin enthusiasts can reduce token issuance costs by using PUMP.FUN after selecting good Tickers.
Early discoverers can use cognition and influence to create new Meme coin narratives for specific Memecoins, leading to the formation of communities that can further break the loop.
Celebrities issuing tokens on PUMP.FUN interact across loops, involving crypto users in the Memecoin craze, which is the next breakout concept after NFT assets. Compared to FRIEND.TECH, celebrity tokens and NFT assets can be one of the products of a celebrity’s IP; tokenizing social relationships does not appeal to influencers because their public social resources are abundant, satisfying their private needs.
Memecoin Trader, as the most active player on-chain, needs to track wallets, use tools, and follow social media while developing their own trading strategies to profit from the high-risk, high-reward game. Compared to other risky assets, Memecoin trading is more unstable, with generally low success rates and trading rhythms that increase the probability of losses.
The experience of Memecoin Traders on PUMP.FUN has shown the importance of team support in the face of significant opportunities, highlighting the need for community collaboration even for on-chain players, with community consensus ultimately returning to the consensus of the trading targets. Below is a recap of the process of the release of the $MOTHER token by celebrity Iggy Azalea by @0xSunNFT and community members.
Memecoin Opportunist, whether arbitraging targets on-chain or high-frequency trading bots searching for Alpha opportunities, is the focus of smart wallets. Choosing the right strategy to become a Memecoin Opportunist on PUMP.FUN requires deep consideration.
To use a poker analogy, when the table is hot, entering the pot early can choose sniper bots with good liquidity to seize the opening strategy, increasing participation to amplify profits. When the table is not as hot or the market is relatively bottoming out or stable, choosing a counter-sniping strategy can maintain sensitivity to the market while generating income.
(1) Memecoin Opportunist Sniper Strategy
For each new Memecoin launched on PUMP.FUN, snipe bots select key metrics and execute the first few buy transactions within seconds. This strategy captures significant gains as Memecoin market overall sentiment remains high, resulting in substantial profits for targeted assets over the past few months.
From left to right, $DONALDCAT with a peak market value of $15 million, $Japan with a peak market value of $5 million, and $Nigi with a peak market value of $12 million.
Sniper bots for the opening strategy need to be sensitive to market sentiment. Unlike Solana Sniper Bots that regular users may use, sniping on PUMP.FUN is not based on contracts but on the issuance of tokens, requiring clear monitoring of user interactions on the Solana chain and the platform, while also filtering out tokens issued by Devs engaging in rug behavior. After sniping, setting parameters for timely stop-loss or take-profit adjustments, backtesting data, and adjusting sniping capital allocation are crucial.
(2) Memecoin Opportunist Anti-Sniping Strategy
The broad net approach in the sniper bot opening strategy requires a substantial capital requirement as opportunities increase, and there is constant competition from similar strategies, compressing profit margins. As more competitors emerge, the number of Memecoins that can break out gradually decreases. The introduction of the anti-sniping strategy by Memecoin Opportunist is a response to these market changes. The implementation involves:
Regularly summarizing market hotspots and creating token issuance materials.
Testing snipe bot actions and organizing bot strategies (ticker, amount, time…)
Automating token issuance processes and establishing an anti-sniping process.
Adjusting parameters to increase capital utilization.
The anti-sniping strategy leverages the low issuance costs of PUMP.FUN. Constructing a well-adjusted anti-sniping strategy can bring in profits ranging from 2% to 20% in a short amount of time.
Parameter construction requires analyzing the behavior of sniper bot addresses. Short-term hotspots in the market can continually trigger strategy signals, automating the entire process of the anti-sniping strategy is key to improving capital utilization efficiency and increasing profit. The anti-sniping strategy can achieve low-risk arbitrage while selectively identifying good Memecoin narratives at low costs and seizing potential future airdrops.
BSC chain attracts traffic and funds through the Meme-Innovation-Program activity to lay the initial foundation for the Meme track; Base chain is currently launching the Base Onchain Summer activity under the leadership of its founder, with Base’s Memecoin set to receive a skewed flow of traffic. Public chains organize campaigns to lay out Memecoin and related tracks, while PUMP.FUN, as a unicorn app in the emerging track, is currently only operational on Solana. While believing in the PUMP.FUN team and product, the strategy for participating in the track should also consider hot cycles.
In the author’s view, the ways in which institutions enter the field have been largely determined. Whether through strong acquisitions at low points or participation as investors, leading players in the track will return to their rightful value in both primary and secondary markets. Therefore, the author believes that adopting the Memecoin Opportunist anti-sniping strategy is the best way to lay out the entire track early through PUMP.FUN.
Conclusion
From Ethereum to Solana, from Shiba Inu to frogs, from crypto enthusiasts to breakout celebrity effects, people’s pursuit of traffic hotspots never stops. From the sloth burning the pool to the innovative Memecoin issuance on PUMP.FUN, people continue to explore the decentralization and fairness mechanisms of Memecoins.
PUMP.FUN, as the leader in the emerging track, has completely changed the Memecoin ecosystem with its ultra-low-cost issuance model. The application ecosystem it has built meets user needs, making it a unicorn project in the crypto field. As the most crypto-native narrative app, it has not even released its own platform token yet. The ultimate formation of its economic flywheel requires pioneers in the track to continue exploring.
According to Defillama, the PUMP.FUN protocol as a Memecoin issuance platform on Solana generates monthly revenue surpassing Uniswap Labs, making it the fourth-largest protocol across all blockchain networks. Faced with this unicorn app that lacks additional disclosure, we need to understand what it truly is. Some may see it as a large casino, while others may view it as another platform for PVP in the crypto world with depleted liquidity. The author believes that besides these characteristics, it should be a revolutionary product for new crypto assets, embodying the decentralized spirit in an extremely cost-effective way. Just as Bitcoin rewarded early miners and evangelists, why can’t Memecoins reward users who discover their value through a game process, with PUMP.FUN consuming brainpower and physical effort rather than electricity?
“Before learning to build, do not consider deconstructed things as the final answer to problems.” Facing the surging wave of Memecoin reforms in the crypto MATRIX world, the author will swallow the green pill of PUMP.FUN with a peaceful mindset.
References
[1] https://foresightnews.pro/article/detail/59863
[2] https://messari.io/report/analyst-discussion-pump-fun
[3] https://www.theblockbeats.info/news/53703
[4] https://x.com/lukema95/status/1788858814420382121?t=A2CvlJFGTTlxko7Ymtpojw&s=05
[5] https://mp.weixin.qq.com/s/JwqVcjY0ENUFFk9oI79VfQ
[6] https://www.youtube.com/watch?v=losZU4qcs-M&t=4s
