Pump's bullet hits the bull's-eye

Just now, Alon, the co-founder of pump.fun, posted that the official X account of pump.fun was hacked and a fraudulent token "PUMP" was released, reminding users to be aware of the risks.

Recommended reading: In-depth decryption of Pumpfun: the untold story and valuation analysis behind the meme coin casino

As the most active meme coin launch platform in the Solana ecosystem, Pump.fun has once become the wealth creation myth for retail investors, relying on the "internal incubation + external explosion" two-stage mechanism. The token first accumulates liquidity through the Bonding Curve mechanism on the platform, and when the trading volume exceeds the $69,000 threshold, it automatically migrates to the leading DEX Raydium to establish a liquidity pool, completing the closed loop from project launch to market speculation. This meticulously designed set of rules went into crazy operation in 2024:

From April 1 last year to date, the tokens launched from Pump.fun have contributed $346 billion in trading volume to Raydium, accounting for half of the total flow of that DEX, and of the $197 million in fees accumulated by the platform, $104 million came from Pump.fun's transactions.

However, when celebrities like Trump brought in "flash-in-the-pan" tokens (such as TRUMP, MELANIA), this game of musical chairs began to expose its naked harvesting logic. On-chain data shows that more than 70% of meme coins showed a "pool-building-is-the-peak" trend in the external pool stage, with an average lifespan of less than 48 hours.

The more dangerous signal comes from the complete ebb of liquidity. On February 24, only 1 of the tokens graduated from Pump.fun had a market cap barely exceeding $1 million, and the on-chain speculative fever was almost frozen. The trading depth of meme coins on Raydium has shrunk by more than 90% from its peak, and the on-chain stablecoin market cap on Solana has seen a net outflow of over $1 billion in the past 30 days, the largest capital hemorrhage since the FTX collapse.

This collapse is no accident. When the project party, trading platform and celebrities form a "harvesting iron triangle", when the mathematical model of Bonding Curve becomes a drainage tool, the confidence of retail investors has long been eroded in the repeated "open-and-dump" drama. The failure of Pump.fun is not only a microcosm of the liquidity crisis in the Solana ecosystem, but also a cruel interrogation of the entire crypto world on the meme narrative - when the bubble bursts and the carnival is over, who will clean up this wasteland of capital carnage?

SOL drops more than 50% from its high, the ecosystem is in a slump

As one of the best-performing public chain tokens in 2024, Solana rode the wind of Pump and meme to soar, rising nearly 200% for the year.

But since Trump launched a token on Solana on January 18, this wave seems to have finally been washed ashore: SOL's price first hit a record high of $295 on January 19, and then plummeted, with the decline exceeding 50% at one point.

And with only 3 days left until the largest token unlock in Solana's history (worth $2 billion), 11.2 million SOL will be unlocked and circulated, most of which come from the FTX auction purchase at a cost of $64, which could also form a huge selling pressure.

In addition to the poor token price performance, according to Defillama's data, Solana's ecosystem TVL has dropped from a high of $12.19 billion to $7.22 billion today, and its daily transaction fee revenue is also declining.

Furthermore, Solana's 24-hour net inflow data shows that a staggering $260 million was outflowed on January 18 and 19 alone, and the inflow of funds has been declining ever since, far less than the Pump era.

Not only that, other indicators are also not optimistic, with the recent 7-day performance of Solana's mainstream protocol tokens also showing a downward trend:

Image: Rootdata Solana ecosystem market performance

Overall, the ecosystem presents a scene of "the tree falls and the monkeys scatter".

This also inevitably raises the question: Is Solana's story over?

Solana labs co-founder Toly is also afraid of the collapse!

Faced with the risk of token price collapse, the Solana ecosystem is experiencing the biggest fear, uncertainty and FUD since the FTX meltdown. Analysts have estimated that scammers have amassed over $10 billion in the entire meme coin speculation cycle.

Facing the unavoidable reality problems, many community members have also responded.

As the co-founder of Solana labs, Toly has always advocated for healthy technical development and innovation, and he has also repeatedly called on builders to return to innovation and build quality projects. Although he did not directly criticize, his conversations with other community members on X often revealed his dissatisfaction with Pump. Faced with the questioning of long-term supporters, he even responded that "the assholes that mess with markets to max extract can go f' themselves."

Crypto KOL@cobie has also repeatedly pointed out the problems of the PVP model. He said "the current market trajectory is that market participants are eagerly rushing into these scams like moths, and most people know these are scams, but the goal is to sell to the bag holders at 3 times the price. They just want to get rich overnight in 2 weeks, not 2-4 years. Players hope they can also hit the jackpot in the next move."

Of course, the community is also making self-rescue attempts. Solana launched the SIMD-0228 proposal on February 26, setting a 50% target staking rate. If the staking rate exceeds 50%, the issuance will be reduced and the yield will be lowered; if it is less than 50%, the issuance will be increased and the yield will be raised. The minimum inflation rate is 0% and the maximum inflation rate is determined based on the current issuance curve. This proposal aims to shift Solana's issuance towards a market-driven model.

In addition, the Solana spot ETF has become another lifeline - the Polymarket prediction platform data shows that the market believes the probability of approval before 2025 is as high as 85.4%, and the probability of passing by June has also risen to 34%. If realized, referencing the cumulative trillion-dollar capital suction effect of the Bitcoin ETF and the hundred-billion-dollar Ethereum ETF, Solana may welcome a capital injection of tens of billions of dollars.

Solana's predicament is not an isolated case, but a microcosm of the industry's "speculative backlash against innovation".

As KOL@0xNing0x summarized: "Now we have entered the settlement moment of this cycle, the P-kids are the MVPs, Solana, Pump.fun, Jupiter are the best supports, TRUMP is the lying dog, AI16Z is the lying dog, JLP holders are the lying dogs. The losers are Base and Virtual, Ethereum, Arbitrum, Optimism, ZkSync, Starknet are the solo laners, mid laners, junglers and supports."

At present, Solana's way out may only have two paths: either rely on external capital such as ETFs to forcibly extend its life, but may deepen its path dependence on the financial casino; or as Toly advocates "scraping the bone to detoxify", enduring short-term pain to rebuild developer faith.