Author: 🔫Scof💀, the Lying Gun, ChainCatcher
Editor: TB, ChainCatcher
Pump's Bullet Hits the Bullseye
Just now, Pump.fun co-founder alon posted that the official X account of Pump.fun was hacked and a fraudulent token "PUMP" was issued, reminding users to be aware of the risks.
As the most active meme Bit platform in the Solana ecosystem, Pump.fun, with its "internal incubation + external explosion" two-stage mechanism, has once become the wealth creation myth for retail investors. The Bit 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 Bits launched from Pump.fun have contributed $346 billion in trading volume to Raydium, accounting for half of the DEX's total flow, and of the $197 million in fees collected by the platform, $104 million came from Pump.fun's trading.
However, when celebrities like Trump brought in "flash-in-the-pan" Bits (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 Bits showed a "pool-building is the peak" trend in the external market stage, with an average lifespan of less than 48 hours.
More dangerous signals come from the widespread recession of liquidity. On February 24, only 1 Bit out of the Pump.fun graduates had a market cap barely exceeding $1 million, and the on-chain speculative fever was almost frozen. The trading depth of meme Bits on Raydium has shrunk by more than 90% from its peak, and the market value of stablecoins on the Solana chain has seen a net outflow of more than $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 immediately plummet" 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, Ecosystem in Doldrums
As one of the most eye-catching public chain Bits in 2024, Solana rode the wind of Pump and meme to march forward, rising nearly 200% for the full year.
But since Trump launched a Bit on Solana on January 18, this wave seems to have finally been washed ashore: SOL's Bit price first hit a new high of $295 on January 19, and then plummeted, with a drop of more than 50% at one point.
And with only 3 days left until the largest-ever Bit unlocking (worth $2 billion) in Solana's history, 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 Bit 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 trading fee revenue is also declining.
Furthermore, Solana's 24-hour net inflow data shows that a massive $260 million was outflowed on January 18 and 19 alone, and the inflowing capital has been declining ever since, far less than the Pump era.
Moreover, other indicators are also not optimistic, with the recent 7-day performance of Solana's mainstream protocol Bits also showing a downward trend:
Figure: Solana ecosystem market performance on Rootdata
Overall, the ecosystem presents a "fallen tree, scattered monkeys" scene.
This inevitably raises the question: Is Solana's story over?
Solana Labs Co-founder Toly Also Fears Collapse!
Faced with the risk of Bit price collapse, the Solana ecosystem is experiencing the greatest fear, uncertainty and FUD since the FTX implosion. Analysts have estimated that scammers have amassed over $10 billion in the entire meme Bit 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 has 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 have repeatedly revealed his dissatisfaction with Pump. Faced with the questioning of long-term supporters, he even responded "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 development trajectory is that market participants eagerly rush into these scams like moths to a flame, and most of them 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. On February 26, Solana launched the SIMD-0228 proposal, 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 SOL issuance to a market-driven model.
In addition, the Solana spot ETF has become another lifeline - Polymarket's forecast data shows that the probability of approval by 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 Bitcoin ETF and the hundred-billion-dollar effect of 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 defeated SVP are Base and Virtual, Ethereum, Arbitrum, Optimism, ZkSync, Starknet are the mixed-up solo, mid, jungle and support."
At present, Solana's way out may only have two paths: either rely on external capital such as ETF to forcibly extend its life, but may deepen the path dependence on the financial casino; or as Toly advocates "scraping the bone to detoxify", endure short-term pain and rebuild developer faith.
