According to data from Dune, tokens created on Pump.fun account for 62.3% of the total transactions on the Solana decentralized exchange (DEX) since the beginning of November, while volume has increased by 42.3%. This indicates that the protocol is gaining a foothold in the Solana ecosystem.
Pump.fun launched in January this year, allowing anyone to launch a token. Initially, the platform charged a few dollars to execute, but the team eventually decided to make it completely free. As a result, Pump.fun has gradually become one of the most culturally significant crypto projects, creating some of the largest memecoins of the year such as PNUT, GOAT and CHILLGUY.
However, the platform has also faced significant pressure after a series of controversial, ethically questionable and illegal tokens appeared on the platform. It all started when a mother took questionable sexy actions during a live stream to pump her son's memecoin. The platform took a concerning turn when another memecoin developer self-immolated due to their token.
Subsequently, Pump.fun decided to add live streaming as a native feature. Previously, users would live stream on third-party websites, such as Kick. Initially, this feature had serious bugs, so users were not interested. But some recent live streams on the Pump.fun platform have caused viewer discomfort. Even some live streams on Pump.fun have had content threatening animals, such as beheading chickens, bestiality, and suicide, although they were later claimed to be stunts.
This has caused outrage across the industry, and calls for the platform to disable the live streaming feature have started to emerge.
Anonymous on-chain detective WazzCrypto predicted that the U.S. Department of Justice will shut down the website. Additionally, crypto lawyer Preston Byrne stated that the project is likely to violate the law.
"Pump.fun has done a lot of things wrong from a social media law perspective. No terms of service, no DMCA registration and copyright policy, no privacy policy," Byrne, Head of Legal at Arkham Intelligence and Managing Partner at Byrne & Storm, stated.
He believes this has put Pump.fun in a precarious legal position, especially in the United Kingdom where the company is headquartered. Therefore, he agrees that the decision to suspend the live streaming service until the legal issues are resolved is the right one, a process Byrne says takes only 10 hours.
If the worst-case scenario occurs and Pump.fun is banned, this could have a ripple effect on the Solana network. As mentioned, Pump.fun accounted for 62.3% of transactions so far in November, but the situation has been similar in recent months.
In September and October, Pump.fun accounted for 60% and in August it accounted for 57% of the total DEX transactions on Solana. This figure does not even include the amount of transactions that occur before a token moves to DEXes after reaching a $69,000 market capitalization.
For this reason, some have started to fear the worst for Solana, as the network is heavily reliant on the declining nature of Pump.fun.
Pump.fun has sent an additional 22 million SOL to Kraken early today. According to blockchain data on Solscan, the total amount sent from the Pump Fun Fee Account to Kraken over the past month exceeds $94 million.
The latest withdrawal has sparked speculation that Pump.fun is selling SOL on centralized exchanges, a move that some believe could suppress the price of SOL. However, anonymous co-founder Alon Suy quickly responded, calling these "inaccurate" rumors.
"Did you know that you can send assets to an exchange without necessarily selling them?" Alon asked to refute the claim from the well-known on-chain data account Lookonchain that Pump.fun had sold SOL. Lookonchain later edited the information and clarified that they could not verify the SOL sale.
This popular memecoin launchpad has generated over $220 million in revenue since its inception in January 2024. A significant portion of that revenue is said to have been sold or moved off-chain, angering the community as early as June.
"Pump.fun developers are actively selling the funds they've moved into USDC, extracting money from retail. If this value destruction continues, it will become a major impediment to minting on Solana," 0xSisyphus said in June.
Whether Pump.fun is using SOL as collateral for leveraged trading on Kraken or simply selling it, the asset continues to appreciate along with the platform's growth. SOL has recently reached an All-Time-High, surpassing $263 before retreating.
You can view the SOL price here.
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Dinh Dinh
Bitcoin Magazine
