Author: Nancy, PANews
On February 24, after the time token platform Time.fun officially launched on Solana, the Solana official team quickly provided strong support, with Solana co-founder Toly even mentioning it in a tweet, giving the market high exposure. This move is not only a powerful response to the blood-sucking of Pump.fun's liquidity, but also another growth exploration after the celebrity token chaos has severely damaged the Solana ecosystem.
Pump.fun intends to "overturn the table", and the Solana ecosystem crisis is intensifying
After experiencing the Libra celebrity coin scandal, Solana's liquidity was quickly drained, and the market sentiment remained depressed. As the traffic engine of the Solana ecosystem in this cycle, and the "money printer" on the chain, the protocol is currently struggling to continue providing liquidity, and multiple factors such as self-built AMM, token issuance rumors, continuous token dumping, and regulatory litigation uncertainties have also made the Solana official "dissatisfied".
In January this year, Pump.fun's business continued to grow, but unfortunately encountered litigation. According to a Bloomberg Law report at the time, Pump.fun is facing a class-action lawsuit, accused of violating U.S. securities laws by marketing and issuing highly volatile MEME tokens that put investors at great financial risk, and collecting nearly $500 million in fees. The lawsuit has been filed in the U.S. District Court for the Southern District of New York, with the plaintiffs describing it as a "new evolution of a Ponzi scheme and pump and dump." Shortly after, two U.S. law firms, Burwick Law and Wolf Popper, also sued Pump.fun, demanding that the platform delete tokens using its IP, pointing out that these tokens used unlicensed intellectual property (including its logo and name).
Worse, with the "burnout" of MEME, as the first to be hit by this wave of impact, Pump.fun's graduation rate and trading volume have also dropped significantly, leading to an overall decline in the activity of the Solana ecosystem.
The Block data shows that as of February 24, the graduation rate of Pump.fun tokens to Raydium was only 0.96%, down 54.7% from the historical peak of 2.12%. At the same time, Pump.fun's on-chain transactions have also cooled down significantly, with the daily trading volume dropping from a peak of $3.13 billion in January this year to $190 million as of February 24, a drop of 93.9%. In terms of protocol fee income, DefiLlama data shows that as of February 25, Pump.fun's protocol fee income was $2.45 million, a decrease of nearly 84.1% from the historical peak (January 25 was $15.38 million).
The sharp decline in business has forced Pump.fun to explore more products. However, some of these measures are undoubtedly a heavy blow to the Solana ecosystem, which has not yet recovered. Earlier this month, crypto KOL He Bi (@hebi555) revealed on X that Pump.fun plans to use the Dutch auction model to raise funds on multiple CEXs (centralized exchanges). Although Pump.fun's co-founder Alon denied this rumor and said the potential token news was untrue, this response was questioned by many industry insiders. For example, Wu Blockchain publicly pointed out that Alon was lying, and multiple CEX listing companies have confirmed Pump.fun's token issuance plan and said they can publicly disclose the relevant preparation documents after obtaining permission. If Pump.fun eventually issues tokens, it will undoubtedly have a huge impact on the Solana market, especially in the context of tight liquidity, which will inevitably lead to greater capital outflows.
Moreover, Pump.fun has already earned considerable income through trading fees, and has even ranked 10th among the world's top 10 gambling companies by 2024 with an annual revenue of $1 billion. According to Onchain Lens monitoring, Pump.fun has accumulated about 2.99 million SOL, currently worth about $431 million, and its continuous cash-out behavior has also brought considerable selling pressure to the SOL token.
More worryingly, Pump.fun recently intends to "overturn the table". On February 24, the market rumored that Pump.fun is internally testing its self-developed AMM (automated market maker) liquidity pool, and the community speculates that it may launch its own Swap platform to replace the third-party provider Raydium in order to extract more trading fees, which the community generally believes is too greedy. If this news is true, it will undoubtedly deal a heavy blow to the DEXs on Solana, as Raydium and Jupiter, which carry a lot of liquidity from Pump.fun, are the liquidity hubs of the Solana ecosystem. To make matters worse, platforms like Raydium and Jupiter have also been implicated in the Libra insider token issuance scandal recently.
After this news came out, CoinGecko data showed that after the news of Pump.fun's AMM was released, the price of Raydium's token RAY had plummeted by 40.9%, although the overall market decline also had a certain impact on this.
Regarding Pump.fun's possible complete abandonment of Raydium, Raydium's core contributor InfraRAY responded that this is a "strategic misjudgment" and questioned whether Pump.fun can replicate the existing success. He also pointed out that if Pump.fun turns to a new AMM, it may face risks such as insufficient infrastructure, low demand for token migration, and insufficient trading volume in the early stage of launch. It is worth noting that the Solana Foundation invested in Raydium and Jupiter in October 2020 and March 2021 respectively, and Pump.fun's "solo flight" move undoubtedly touches the interests of the Solana Foundation, which will undoubtedly bring greater uncertainty to the Solana ecosystem.
"Those bastards who disrupt the market to maximize their profits can reap what they sow. But those companies that create quality products, charge transparent fees, and compete for users are great. Their revenue should be the motivation for you to compete and seize their market share," Toly's latest tweet was also interpreted by the community as criticizing Pump.fun.
Empowered by the MEME core, Time.fun is strongly supported by the Solana official
As one of the important drivers for Solana to turn the tide, MEME has become the new product that the Solana official has begun to openly support after being betrayed by Pump.fun.
As a product from the same AllianceDAO, Time.fun is a time token platform similar to the previously popular Friend.tech, allowing creators to tokenize their time and sell it as tradable tokens. Initially, the product was based on the Base network, but announced in November 2024 that it would migrate to Solana. At that time, Time.fun co-founder 0xKawz said, "Over the past year or more, Solana has made significant strides in many ways. In comparison, the Ethereum ecosystem feels fatigued, often overly focused on technology and arrogant. The atmosphere of Ethereum is like a group of high-minded philosophers. If Ethereum does not solve its cultural problems, as more developers like Time.fun choose to migrate, Solana will gradually take the lead."
On February 24 this year, after Time.fun officially migrated to the Solana network, it publicly promoted a MEME token called "toly's minutes" on X. This tweet also received a reply from Toly himself, who said that time is fun and business communication is his favorite crypto application case. This statement once drove the market value of the token toly to soar. Subsequently, Toly also posted more than a dozen tweets about Time.fun, showing his obvious support. In addition to Toly, Solana co-founder Raj Gokal and Solana ecosystem project Helius CEO Mert Mumtaz also participated in the promotion of Time.fun.
For Solana, Time.fun's gameplay is similar to Pump.fun, both with a MEME core, and supporting this product may continue this trend. At the same time, Time.fun has adopted a celebrity token model with a verification mechanism, which to some extent reduces the common RUG risk in the previous celebrity MEME coin chaos.
According to The Block report, Kawz, the founder of Time.fun, said that the platform may consider issuing its own token in the future. If other platforms are built on the tokenization of time, a platform-based token can connect them all together. However, Kawz also admitted that it is still too early to discuss the issuance of the Time.fun token, as the platform must first find the market fit for its product. The key goal of the platform is to make the tokenization of time composable, so that other platforms built on Time.fun can use it. He pointed out that Time.fun's true long-term goal is to create a new asset class that allows people to own, trade, and use others' time for various products and services.
The ecosystem is facing a downturn, but manykey indicators remain strong
Recently, the Solana ecosystem has faced many challenges, with constant market FUD.
On the one hand, the MEME on Solana has seen a significant decline in market capitalization after its hype. CoinGecko data shows that as of February 26, the market capitalization of MEME on Solana was $8.64 billion, down from nearly $15 billion in January.
At the same time, the massive unlocking of SOL is also putting pressure on liquidity. 12.2 million SOL will be unlocked and enter circulation on March 1, which is the largest token unlock in history (worth $2 billion). According to crypto analyst Artchick.eth, more than 15 million SOL (about $2.5 billion) will enter circulation in the next three months, most of which were purchased by institutions like Galaxy Digital, Pantera Capital, and Figure through the FTX auction at $64 per SOL, leaving them with substantial unrealized profits. Trader RunnerXBT pointed out that Galaxy Digital, Pantera, and Figure have $3 billion, $1 billion, and $150 million in unrealized profits on SOL, respectively. The market speculates that these institutions may sell their holdings, and the recent Ponzi scheme of the MEME coin LIBRA endorsed by the Argentine president has exacerbated market panic.
The data also directly reflects the pressure facing the Solana ecosystem. Artemis data shows that as of February 24, the number of daily active addresses on Solana was 5.3 million, a decrease of more than 34.5% from the peak this year. The daily trading volume has also dropped significantly from the year-to-date high of $27.7 billion, a decline of 62.1%, now standing at $10.5 billion. The decline in DEX trading volume is particularly significant, although it still ranks second among all chains, it has dropped 89.9% from its January peak. In addition, the SOL token price has also fallen 46.2% from its peak of $262.6 this year.
These data reflect a significant decline in the activity and market enthusiasm of the Solana ecosystem. However, Solana still performs outstandingly in many key indicators. Artemis data shows that as of February 24, Solana ranked first in terms of daily active addresses with 5.3 million, surpassing Ethereum, NEAR, SUI, and Aptos. In terms of transaction volume, Solana's daily transaction count of 56.5 million is far ahead, while other chains only have millions or even fewer transactions. In terms of TVL, Solana's TVL reached $7.3 billion, second only to Ethereum, surpassing Sui, Avalanche, and Aptos.
In addition, Solana also has several potential positive factors, such as the expected SOL spot ETF application and the open proposal SIMD-0228 to modify the Solana inflation model, which may inject more confidence and liquidity into Solana.
