What is Pump.fun?
Pump.fun is a platform on the Solana network that has radically simplified meme-token creation: users provide a name and image, and the platform automatically issues the token and organizes trading. PUMP is the platform's native token.
How it works
New tokens are sold via a bonding curve: price increases by formula as purchases are made, and upon reaching a market cap threshold, liquidity is transferred to a decentralized exchange. The platform earns through fees, with a portion of revenue directed toward repurchasing PUMP tokens from the market, linking the token's value to platform activity.
Pros and cons
- Pros: direct link between token value and product revenue, market leadership in its segment, token buyback program.
- Cons: dependence on speculative meme-coin trends, reputation and regulatory risks, extreme volatility.