Pump.fun hits $100m revenue, but users criticize unsustainable model

Solana’s Pump.fun has raised $100 million since its launch in January, but users are not sure if this success bodes well for crypto and decentralized finance.

It took 217 days, or about seven months, for the Solana (SOL) memecoin launch to reach record revenue. Pump.fun achieved this milestone by beating DeFi giants like Ethena (ENA), Pancakeswap (CAKE), and even Curve Finance (CRV).

Pumpdotfun became the fastest-growing app in terms of revenue in the history of the crypto economy, generating $100 million in revenue in just 217 days.

Love it or hate it, Pump is a big signal to developers to build on Solana and a Trojan horse for consumer blockchain adoption. pic.twitter.com/xhTNpLBoCW

— Ryan Watkins (@RyanWatkins_) September 2, 2024

The protocol allows anyone to create meme-inspired tokens on Solana’s blockchain. Once developers launch a coin, it trades on a bonding curve until the crypto surpasses a market cap of $69,000.

Solana has become the memecoin chain of choice in DeFi after the service launched in early 2024. At one point, developers created over 500,000 memecoins through the platform in a single month. With token creation becoming a matter of a few clicks, the launchpad has paved the way for oversaturation in the Solana ecosystem. A crypto.news investigation found that less than 1% of Pump.fun wallets generated $1,000 or more in profit.

Crypto users are not happy with Pump.fun’s success

Pump.fun may have reached $100 million in revenue in record time, but many have questioned whether this is a net positive for DeFi and the entire cryptocurrency industry.

The biggest concern, however, stemmed from the sustainability of the protocol and the promotion of the casino-like dark side of digital assets.

One user argued that the platform was fueling money-grabbing attempts by celebrities who were not in line with the crypto spirit. From Andrew Tate to Iggy Azalea, celebrities launched Pump.fun memecoins. Many of the tokens have fallen far below their peaks.

Questions also remain about how the Solana-based platform will be scrutinized by regulators, with agencies such as the U.S. Securities and Exchange Commission arguing that SOL, and perhaps its ecosystem, violated federal securities laws.

Ask them:

1. How big and sustainable can a business model be where scheming corporate insiders and cash-strapped D-list celebrities compete with regular people in retail?

2. How many of the hardcore users were minors?

3. How long will it take for lawmakers and regulators to take action once they become more aware of 1 and 2?

— Catfish Fisherman (@CatfishFishy) September 2, 2024