Founder of pump.fun Alon had a strong reaction after the collapse of the LIBRA memecoin, criticizing those behind it for exploiting users for personal gain.
Founder of pump.fun outraged after LIBRA memecoin scandal: "The community needs to be protected"
On 18/02, the founder of the memecoin issuance platform pump.fun, Alon, posted on X, expressing his utmost outrage at what happened in the collapse of the LIBRA memecoin last weekend.
I'm disgusted by the events that transpired over the past days surrounding $LIBRA. The people behind this project made substantial personal gains at the expense of many users, the ecosystem, and even an entire country.
— alon (@a1lon9) February 17, 2025
I hope the people responsible get what they deserve.
I'm…
He did not hesitate to call this a large-scale insider fraud, where those behind it profited personally, pushing thousands of small investors into bankruptcy, causing serious damage to the entire crypto market and even negatively impacting an entire country. Alon said:
"I am truly outraged by what happened with LIBRA. The people behind this project have made a huge profit, while countless small investors have lost everything."
Looking back at the incident, on 15/02, LIBRA was promoted as the "official memecoin of Argentina", receiving public support from President Javier Milei. However, just a few hours after its launch, over $107 million in Liquidation was withdrawn, causing LIBRA's market capitalization to plummet $4.4 billion, making it one of the fastest collapses in crypto history.
1H chart of the LIBRA memecoin, screenshot on DEX Screener at 05:00 PM on 18/02/2025
Under public pressure, President Milei hastily deleted his post promoting LIBRA and denied any involvement, claiming that he only "shared" but did not "promote" this token. Subsequent analyses have exposed a "hidden force" that not only controlled LIBRA but was also linked to MELANIA and a slew of other memecoins, orchestrating pump & dump campaigns to reap hundreds of millions of dollars from small investors.
An even bigger shock came when a "insider" of LIBRA frankly admitted that his team had self-sniped the LIBRA token to control enough initial Liquidation when the token was launched. This confession has shaken the entire crypto market, as such insider trading incidents like LIBRA have been happening for a long time and are still ongoing.
It is precisely the issues related to insider trading and the team's "expansion" plan for political memecoins to other countries that have led Alon to question the role of the development team and market makers in the memecoin market. According to him, this loophole creates the conditions for a small group to manipulate projects and exploit investors. The founder of pump.fun shared:
"Creating a memecoin is a process so simple that anyone can do it, without relying on any intermediaries. The presence of a development team and market makers not only increases the risk but also paves the way for manipulation and profiteering from investors."
In addition, Alon also emphasized that the pump.fun platform was created to address the issues exposed by the LIBRA scandal by automating, standardizing and democratizing the token creation process. Instead of giving control to development teams and market makers, pump.fun allows anyone to create memecoins in a transparent and fair manner, minimizing the risk of manipulation.
Alon's statement is like a "cold shower" directly on the M3M3 launchpad, a memecoin issuance platform that has been heavily questioned about its transparency, especially after the shocking revelations about the involvement of Meteora and Kelsier Ventures in the LIBRA case.
According to information from DefiTuna, M3M3 is not just a launchpad, but is allegedly a tool used by Kelsier Ventures and Meteora to manipulate and siphon off more than $200 million from memecoin projects. The revelations show that when a memecoin project wants to launch on M3M3, they are required to allocate a portion of the token supply to be transferred to Kelsier Ventures and their team.
Finally, Alon refuted the view that the LIBRA collapse could be the end of memecoins. On the contrary, the demand for creating and trading on-chain assets will continue to exist and grow strongly.
"I understand that many people want to see the end of memecoins because of such fraud incidents. But the fact is, the demand for freely creating and speculating on on-chain assets will never disappear."
As a result of the devastation caused by the events, many people have said that this may be "the end of memecoins".
— alon (@a1lon9) February 17, 2025
While I sympathize with people that want to see an end to memecoins because they're tired of such incidents taking place, the fact is that user demand for…
With this view, Alon emphasized that launchpad platforms like pump.fun need to have better measures to protect users, rather than letting the market drift as it is currently. He has put forward three main proposals to help users trade more safely while still meeting their needs, including:
- Educating users on how to safely and ethically launch memecoin: pump.fun helps simplify the process of creating coins, but users still lack guidance on how to operate, manage the supply, and mitigate risks after launch.
- Improving the experience for new investors: The crypto market is expanding, attracting many professional traders, but platforms and KOLs need to support newcomers instead of just focusing on advanced trading tools.
- Platforms issuing tokens should enhance user protection: hide suspicious tokens, set reasonable slippage (below 20%), and integrate tools to help users assess risks more effectively.
That being said, it's important for platforms like pump fun to provide guardrails to ensure users are as safe as possible *while meeting their demands*
— alon (@a1lon9) February 17, 2025
Here are my thoughts on some things that should be focused on to achieve that:
1) Educate users on how to safely and ethically…
In the comments below Alon's post, Bankless founder David Hoffman suggested adding a mechanism to control snipers in the pump.fun smart contract. He suggested the platform could create a "sale window" of 30 minutes after the token launch to control transactions and help stabilize the price.
Have you thought about adding any additional mechanisms into the Pump contracts and interface to try and mitigate launch shenanigans?
— David Hoffman (@TrustlessState) February 17, 2025
As terrible as Hayden was, I do believe that early snipers can really fuck up everything downstream.
A 30minute sale window to allow orderly…
However, Alon opposed this idea, arguing that adding more complex on-chain mechanisms could give users a false sense of security, while the underlying risk would not change.
for specific, highly anticipated launches there could be some mechanisms that help. but generally, introducing more onchain mechanisms does little outside of making the UX more complicated. worse - they give users the illusion of safety when in fact the game theory hasn't changed
— alon (@a1lon9) February 17, 2025
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