After the controversies surrounding the LIBRA Token, the Solana-based launchpad Pump.fun has witnessed a significant decline in the number of new users, the number of deployed Tokens, and transaction fee revenue. This reflects the cautious sentiment of investors towards the memecoin sector.

According to data from dune analytics, the number of new users on Pump.fun decreased by 16.4% in the week from February 7 to February 13, from 719,524 to 601,516. This is the first time since the end of November that the daily average of new users has dropped below 100,000.

The number of deployed Tokens also decreased significantly, dropping by 26.3% from 344,607 to 253,955 after the LIBRA incident. However, as of February 21, Pump.fun has already issued nearly 8 million Tokens in just 13 months.

The decrease in the number of Tokens has led to a significant decline in transaction fee revenue. In the week from February 7 to February 13, this platform generated 124,623 SOL, but this figure has decreased by nearly 32% to 85,196 SOL in the following week. This is also the first time since the end of December that the weekly average fee has fallen below 15,000 SOL.

The LIBRA incident has destabilized the memecoin market on Solana. On February 14, Argentine President Javier Milei unexpectedly expressed support for LIBRA, stating that this Token could help finance projects in Argentina.

Immediately after, the LIBRA price skyrocketed, pushing the market capitalization to $4.5 billion before collapsing by 95% by the end of the week. A report from Nansen revealed that two trading wallets had generated over $10 million in profits by buying LIBRA immediately after Milei's post on X and selling at the peak price of $4.55.

This event has raised concerns about insider trading in the memecoin market and has led the community to question the reliability of the Solana ecosystem. This may be the main reason for the significant decline of Pump.fun in the past week.

As of the present time, due to the investor's anxiety and the controversies surrounding memecoins, this sector has decreased by 13.4% since February 14. According to data from Artemis, this is the third-largest decline among altcoin groups during this period.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making any decisions. We are not responsible for your investment decisions.

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