Pump.fun, a Solana-based platform for creating memecoins, is witnessing a high failure rate for its crypto tokens. Despite the initial buzz, only a small fraction of these tokens make it to Raydium, a decentralized finance protocol, reflecting a significant challenge in the memecoin market.
According to Dune Analytics, the success rate of memecoins created on Pump.fun and listed on Raydium is just 1.41%, with fluctuations between 1.21% and 1.41% since May. The highest success rate recorded was 2.56% in February. Adam Cochran, a partner at Cinneamhain Ventures, noted that the graduation rate of these tokens has stagnated at 1.4%, indicating that only a few memecoins reach the $69,000 threshold necessary for listing on decentralized exchanges.
Market Reflections and Misconceptions
Cochran also mentioned that no new memecoins have reached a $20 million Fully Diluted Valuation (FDV), suggesting a decline in the memecoin cycle. However, some experts argue that this low success rate does not represent the entire memecoin market. Instead, it highlights how Pump.fun simplifies the process of creating memecoins. Crypto commentator Bunjil pointed out that the platform demystifies the creation process, making it accessible for anyone to launch their own tokens.
Financial Performance and Celebrity Influence
Despite the low launch success, Pump.fun has generated significant revenue from the memecoins that do succeed. The platform charges a 1% transaction fee until a token reaches a specific market cap, allowing it to surpass even Ethereum’s revenue on certain days. For instance, on July 29, Pump.fun earned approximately $864,000, outperforming Ethereum’s $550,000 revenue during the same period. The platform has also gained popularity among celebrities like Caitlyn Jenner, Iggy Azalea, and Jason Derulo, who have used it to create and promote their own memecoins.
Current Market Overview
The overall memecoin market cap is $44.94 billion, with a recent 2.67% decline in the last 24 hours, according to CoinMarketCap. However, trading volume has increased by 27.29%, reaching $4.48 billion. Among the top 100 memecoins by market cap, Book of Memes (BOME) has shown a positive trend, rising by 14.79% in the past week and trading at $0.009.