Compiled & edited by TechFlow

Guest: Alon, Co-founder of Pump.Fun

Moderator: David Hoffman

Podcast source: Bankless

The Next Chapter for Pump.Fun with Co-Founder Alon

Air Date: March 25, 2025

Summary of key points

Alon, co-founder of Pump.Fun, joins us to discuss the rapid growth of their token launch platform, the controversy and impact of Memecoins in the crypto space, and the vision for their newest product, PumpSwap.

This issue provides Alon with a fair opportunity to explain his views on Memecoins, while not ignoring the fact that Pump.Fun was once the core role of one of the most controversial capital operations in the industry. What started as harmless speculation gradually evolved into a structured and systematic capital plunder, ultimately concentrating wealth in the hands of a few and causing the loss of a large amount of capital.

Memecoins may be similar in nature to the impact of tobacco on public health, with inevitable negative effects. I believe that the team at Pump.Fun may not agree with this view because their interests are contrary to this. But we are still in the early days of the crypto space, and we are also in the early days of the development of Memecoins. The future is not yet determined. Memecoins may have a more positive future. Ultimately, Memecoins are just a natural result of crypto technology - giving people the ability to create financial assets without permission. Therefore, whether we like them or not, whether they are a threat to the public interest or the first step towards a more equitable future, the outcome of all this will be shaped by the leaders of the Memecoin industry.

Summary of highlights

• Memecoins are essentially a “tradable unit of attention” whose value is closely tied to the attention given by users.

• I strongly disagree with the statement that “Pump.Fun killed the market cycle”.

• I believe Memecoins will continue to exist in some form as they do provide some value to users, which will take time to prove.

• I hope the narrative of Memecoins will shift and people will no longer think that trading these tokens on-chain is worthless or nihilistic. I have never believed in the so-called "financial nihilism", which is just an excuse on Crypto Twitter to rationalize the current state of the market.

• Twitter is not an ideal platform because its mechanisms tend to intensify emotions and conflicts among users. As a result, many people’s perceptions of other ecosystems are often far from the actual situation.

• The cryptocurrency space is inherently highly social, and this trait permeates the entire ecosystem.

• I don't want Pump.Fun to be a short-term product that only exists for one or two years.

• Pump.Fun's success is mainly due to the strength of our product. We always listen to user feedback and continuously iterate to launch features that truly meet user needs.

• My only goal when I wake up every day is to think about how to make this product more sustainable and how to make users truly feel the value when interacting with the protocol or application. This is what we are always pursuing.

• Talking directly to users was a great way to get their feedback on the market, helping us build a deep understanding of the market conditions at the time.

• Many people invest too much time and energy into building infrastructure. But if no one uses it, it has no meaning.

• I believe that anything culturally significant, especially something that is controversial, is always exploring the boundaries of what is acceptable and what is not acceptable, but we make sure that there is a clear line and that no one crosses it.

The creation of Pump.Fun

David:

Perhaps you could briefly tell us about your origins, your background, and your experiences before Pump.Fun, and then start talking about the conception and creation of Pump.Fun.

Alon:

As for myself and my two co-founders, we have been in this space for a while. We all entered the space as retail traders, buying BTC, ETH, Doge, etc.

As time went on, our interest in the industry grew and we became involved in several different projects. I was personally deeply involved in a project called NFT Perp, which was a futures exchange focused on NFTs.

At that time, we were very active in DeFi and we saw that this market had potential. Taking NFT perp as an example, we saw product-market fit for collectible trading. But after the Terra Luna and FTX incidents, we realized that the market was declining and the prospects of NFT might not be as long-lasting as we thought.

So we wanted to try some new ideas. I quit that position and started experimenting with my two co-founders on all the different ideas we had in this space. We actually mainly develop on Ethereum and its L2s, which a lot of people might not know. We came from the Ethereum ecosystem, started with NFTs, and then developed something on SocialFi, pretty much from scratch, and had a hard time.

I would say we spent at least a year in a state of "chewing glass". One of my co-founders would even say it was probably longer, over two years, just iterating and releasing MVPs (minimum viable products) and working on things we thought people would need. Honestly, when we started, we were not very good at this, we built things that we thought were cool or that we thought would be a trend in the market, but were not actually built for today's users. We didn't really engage deeply with users and build products that solved their current problems.

As we kept iterating and trying more things, our skills improved. But the problem was, we were building for problem domains that we didn't understand. I think at the time we were trying to build a creator fundraising marketplace, but we weren't content creators. The reason we got into crypto was on-chain trading, NFT trading, buying NFTs, and so on. Eventually, when we saw people start trading Memecoins on Solana, we thought it was interesting. To be honest, we were a little hesitant about moving to Solana because we had never used it before and we were developing very smoothly on Ethereum. I think our last project was before moving to Solana, and developing on Solana at that time was a pain and we were not looking forward to it. But at that time, we were very eager to attract users, and users were indeed on Solana. So we decided to go there.

From my perspective, or my co-founders’ perspective, they would definitely say that if users were on Cardano, we would build products on Cardano and do whatever it takes to get users. We saw users on Solana, so we started experimenting there, and there was a lot of excitement in the market, and we felt like we were at the beginning of a new trend. The trading process was very smooth and fast. We enjoyed using the Phantom wallet, on-chain trading, trading on Jupiter, and so on. But we noticed that there were some major problems with the market structure, the way people explored coins, the way coins were created, and ultimately what they traded. What was very popular at the time was that people were doing pre-sales for Memecoins. They would post a wallet address on Twitter or somewhere, and people would send funds there. We saw a lot of people sending their SOL to these pre-sales, and half of the time, the coin didn’t launch successfully, and it was a complete farce. There was no standardization at all, and people didn’t know what to expect. Even if everything went well, the people who created these coins would spend 50% of the funds raised on marketing, which was completely ridiculous. You don’t need to spend millions of dollars to promote your Memecoins, it’s all pointless. At the same time, trading on AMMs or DEXs is very painful, drawing liquidity from liquidity pools, buying honey pots, buying coins that will drain your entire wallet, it’s a very brutal experience.

In the Ethereum ecosystem, I think there is more to explore behind this project, such as its ultimate performance and whether there are management issues. But I really like the idea of ​​creating a small token community without investing money upfront. Through the Bonding Curve, liquidity can be launched based on just an idea.

So the model we ended up coming up with is that you don't need to invest money up front to create a coin. When enough people participate, or the market indicates success, a liquidity pool is created and destroyed. All permissions and related content of the created coin are taken back from the coin creator. Therefore, once created, it is truly permissionless and immutable. When we released this model to the market, we quickly noticed its effectiveness. Although it took us a while to get it working properly, we are very optimistic about some of the prospects of the product.

Pump.Fun’s post-launch performance

David:

This reminds me of the pre-Pump days. Probably the most classic example of this is this Slurf, where we had a Solana developer who publicly said he was going to do a pre-sale for his Memecoins, but there was no Pump.Fun at the time. So he just sent the money to this trusted person who managed it and then launched Memecoins, added SOL to the liquidity pool, and that's how Memecoins were launched. And then, there was this Slurf incident where he accidentally burned the liquidity tokens because he didn't know what he was doing. And there was that famous tweet that said, "Guys, I think I accidentally burned the liquidity tokens, I'm sorry."

I think this speaks to the chaos that existed in the Memecoins market before Pump came along. Pump provides a commoditized platform that allows users to issue Memecoins in a less regulated, more regulated environment. Instead of having to trust an influencer or individual, users can issue tokens directly through the pump.fun platform.

How long did it take you to get users in January 2024? Was it immediate? When did you realize, "Oh, we just created something amazing"? How long did that realization take in the Pump ecosystem?

Alon:

I think we were confident in the project when we first conceived the idea, even before it was launched. Unlike other products we developed before, this time we were truly integrated into the ecosystem. We understood the importance of lowering the barrier to entry. Before, a token needed thousands of dollars of liquidity to be considered valuable. You could certainly see some liquidity pools with only $50, but no one would buy it, right? So we were very confident in the idea at the beginning and quickly launched a Minimum Viable Product (MVP).

To be honest, the product was very rough and had clumsy features. We just wanted to quickly verify whether the idea was worth continuing to develop. After the product was launched, although the number of users was small, their response was very enthusiastic. This made us realize that the project had the potential to continue to develop, and we also received a lot of feedback, which helped us find areas where the platform needed to be improved. So, we began to iterate the product quickly.

At the same time, the problem we faced was that Pump.Fun was a marketplace that connected token creators and buyers. At the time, it was mainly focused on Memecoins, but it also supported other types of tokens. The cold start problem refers to how to attract early users, because most people at the time were trading on other marketplaces or exchanges. It was a huge challenge to get them to move to our platform. We needed to attract both token creators and buyers. Buyers want to see a certain amount of trading volume and activity, otherwise the platform would not be attractive to them.

In fact, we never paid any influencers and didn't have enough funds to do these things. We only had about $100,000 in startup funds, which was not enough to cover the promotion costs. So we took a different strategy - talking directly to users . I personally sent messages to more than 3,000 people to introduce our ideas. This was not a simple copy-paste spam, but a real communication with users, asking them and understanding their thoughts. We didn't overcomplicate the process. We talked to them directly, asking what they were trading and why they did it, which was a great way to get their feedback on the market and helped us build a deep understanding of the market conditions at the time.

Eventually, after building a report like this, we could say, "Hey, I'm building this thing." At first, I only had 200 followers and people thought I was a bot, but after a while, people started listening to us. Eventually, after two months of iteration, we even launched a Pump.Fun on Ethereum L2, but it didn't work. We tried a lot of things on the product side, but in the end, what was needed was to optimize the product to make it good enough and show it to enough people.

We really realized product-market fit about a year ago when two micro-influencers launched their own tokens on our platform. It’s worth mentioning that we didn’t pay them and didn’t know they would do that. They just thought the product was interesting and used it on their own initiative. Since then, more and more people have started to experience our platform.

It was an amazing feeling, probably one of the most exciting moments I’ve experienced in the past few years. Waking up every day and seeing record volumes was a reward for all the hard work I put in. Even though Pump.Fun has since become a huge success, the initial joy of finding product-market fit is still one of my most cherished memories.

Pump.Fun’s Impact on Memecoins

David:

Pump.Fun’s trajectory remains impressive. By March 2025, the memecoin space has had a significant impact on the entire crypto industry. Overall, memecoins have become a common phenomenon, similar to the Monkey craze in 2021. However, due to the launch of a few large memecoins, the reputation of cryptocurrency in mainstream society may have fallen to its lowest point since the FTX crash. This structured and systematic profit extraction behavior has severely damaged the image of the industry and weakened people’s seriousness and trust in the crypto industry.

While Pump.Fun is not the creator of Memecoins, Memecoins existed long before it. For example, Dogecoin was the first Memecoin. However, Pump.Fun played a crucial role in promoting the expansion of the Memecoin space, allowing it to grow from a niche market in cryptocurrency to a mainstream use case in the crypto space today. Can you talk about Pump.Fun's role and influence in this stage of cryptocurrency history?

Alon:

As you mentioned, the market for Memecoins has been around for a long time. I think the history of Memecoins goes back more than 10 years, and has evolved in many forms during this period. Many ICOs can actually be considered Memecoins, and many "food coins" in DeFi projects also have similar characteristics to Memecoins. Even NFTs can essentially be considered Memecoins, because they represent a transaction of cultural value, and people build communities around these ideas. This phenomenon exists not only on Ethereum, but also on other blockchains such as Binance Smart Chain and Solana.

I agree that Pump.Fun has played an important role in expanding the Memecoins ecosystem. It has lowered the barrier to entry and provided the underlying security needed. However, I do not think Memecoins themselves are the main reason why cryptocurrencies have been around for more than 15 years. Many people find the market unattractive because it does not provide enough real value, not because people simply like to trade these "meaningless" Memecoins. This reflects the market's need for unattractive use cases.

I strongly disagree with the statement that “Pump.Fun killed the market cycle.” If you created an L2 or L1 a few years ago and failed to gain any users or product market fit, and your token market cap was $5 billion or $2 billion, and you went to conferences and promised to build the future of finance, obviously people would be upset when they lost a lot of money.

We should have expected these things to happen, the crypto industry has been around for 15 years, it's time to see some tangible results. The projects that eventually succeed are very commendable. For example, Hyperliquid is a great example. They built an excellent product, attracted a lot of users, and the token distribution was very fair. People united to promote the project, and it eventually became a huge success, with the token price increasing 10x or even 15x after launch. This shows that there is a huge market demand for projects with real application value, whether these use cases are speculative or non-speculative. However, such projects are still few and far between.

I think the root of the problem is that many people put too much time and energy into building infrastructure. But if no one uses this infrastructure, its existence is meaningless. We need more application developers than infrastructure developers, maybe 10 times or more. I know this has been a point made by many thought leaders for years, but Pump.Fun is a great example. It shows how to build a product that attracts users and allows them to really test your infrastructure in practice. Just like the significant improvements to Solana in the past year, this approach can drive the development of the entire ecosystem.

Making Memecoins more sustainable

David:

I think there is a recurring pattern in the history of cryptocurrencies, and this pattern can be traced back to 2017. Why did the ICO (initial coin offering) boom of 2017 happen? It was because of the very successful Ethereum ICO, followed by the Augur ICO, both of which were legitimate and had real value. However, as the number of ICO projects proliferated, there eventually emerged some ridiculous, worthless virtual currency ICOs, or even just some memes. This phenomenon is similar to the classic "euthanasia roller coaster" metaphor: a project with real value kicks off a cycle, such as the DeFi summer launch of Compound governance tokens, which then triggers a chain reaction and eventually evolves into mining income offering 10,000% APY. The NFT space has gone through a similar process. I think the same is true for memecoins: some original and fair memecoins were launched at first, but then evolved into a highly speculative and profit-extracting model.

I think the memecoin craze is one of the most fascinating phenomena in the history of cryptocurrency. If you could go back to the beginning of Pump.Fun, would you consider making any changes in the design or construction to encourage more sustainable development? Or was this phenomenon completely out of your control?

Alon:

There are a few points to talk about. I do think the market is a powerful entity. At the end of the day, if that's the nature of cryptocurrencies, then there's very little you can do when market sentiment becomes feverish . These phenomena tend to repeat over time in similar patterns. But I do agree that there's still room for improvement in the mechanism. For example, we just launched PumpSwap yesterday, which is designed to optimize the existing mechanism.

I think a major point of improvement is the alignment of incentives between token creators and holders and traders . While creator revenue sharing is not yet implemented on PumpSwap today, when it is implemented it will allow creators to earn from the volume of PumpSwap transactions. This way, when their token is successful, they will have a strong incentive to maintain the value of their token, and not simply sell off their tokens to cash out, but to keep their tokens relevant and active for as long as possible. I think this is a more sustainable model.

During the NFT boom, I was worried about copyright fees. At the time, copyright fees were very high, so high that users had to find ways to circumvent them. But this model went to the other extreme and became an over-extraction mechanism. I think we need to find a balance in the middle, which is one of the original intentions of creating PumpSwap. We hope to solve these problems through a better mechanism.

However, once again, the nature of cryptocurrency means that it is often closely associated with speculation. Even tokens that initially appear in a pure form can eventually get out of control as people continue to test their limits. For example, Libra is a classic example. Libra is a cryptocurrency project launched by Facebook. Although it is not really Memecoins, its failure reveals a problem: the fact that token issuance requires intermediaries is ridiculous. If you just want to create some kind of token around a simple idea, you don’t need to rely on these intermediaries at all.

This is one of the reasons why we created Pump.Fun. If Memecoins can start a new chapter and the mechanism can be improved to achieve more sustainable development, we fully support this transition. Because I don't want Pump. Fun to be a short-term product that only exists for one or two years and eventually fails or disappears. Although we have achieved some success, if Pump.Fun cannot continue to exist in the next market cycle or in the next few years, it means failure. Every day when I wake up, my only goal is to think about how to make this product more sustainable and how to make users really feel the value when interacting with the protocol or application. This is what we always pursue.

Pump.Fun's 4Chan Aesthetics

David:

I was initially resistant to Memecoins, mainly because they displayed a kind of apathetic quality. They seemed to convey the attitude: "We are not here to create any value. We are just here to trade cartoon characters, not to contribute to GDP growth, and not to try to build anything real. We are just providing a meaningless, nihilistic speculative asset."

However, I have now come to a point of change. While I am not completely sold on this nihilistic asset trade, I think additional incentives can be added to Memecoins to make them truly more sustainable. I want to talk about this, especially your recently announced PumpSwap feature. I feel like this feature could make Memecoins more productive and meaningful in the long run.

One of the great advantages of cryptocurrency is that it makes financial assets accessible to ordinary people. Before Bitcoin, it was almost impossible for individuals to create financial assets. Bitcoin was the first asset created outside of the state system. Since then, the trend of cryptocurrency has been to make the threshold for asset creation lower and lower. I think Pump.Fun is the logical continuation of this trend, especially when you see that it has created 9 million tokens in a year, which means 9 million financial assets.

My next question is, how do we turn these seemingly indifferent financial assets into sustainable business models ? How do we make them truly integrated into economic growth? What is the cultural trajectory of Pump.Fun? Going back to the original design, Pump.Fun seems to have a 4Chan-style aesthetic and atmosphere. Why did you choose this design style?

Alon:

When we were initially developing our MVP (minimum viable product), we chose this style for practical reasons because it was easier to implement. We just wanted to get a product out quickly. But from there, we kept improving and decided to keep this style because we found it correlated with user behavior. Many of the first successful Memecoins were launched on forums like 4Chan, and many users resonated deeply with these platforms. So we have continued this style ever since. While the product still has a lot of room for improvement in terms of user experience and so on, we think that preserving this culture and paying homage to its origins is an important difference between Pump.Fun and other projects that lack cultural connotations. Even if our goal is to scale the product to 10 million daily active users, we want to continue to retain this culture. If this is lost, Pump.Fun will become another soulless Web 2 product, and this is not what we want.

David:

However, some may question whether 4Chan's culture is truly "rich culture". While I am not an expert on 4Chan, my understanding is that it is the "sewer" of the Internet, rife with racism and other bad behavior. Of course, I don't want to generalize, but it does feel like a "Wild West"-like area with no rules. In the cryptocurrency space in 2025, culture is often determined by the core leadership of these ecosystems. Ethereum's culture is influenced by its leadership, as is Solana, and Pump.Fun is no exception. Therefore, I believe that some of Pump.Fun's behavior is determined by its design style and cultural choices.

If we want Memecoins to start a new chapter that is more sustainable and fair, I think 4Chan’s brand image may be a hindrance. Do you agree with this view?

Alon:

I agree with this in general, but I don't think that design style will hinder our efforts to improve our culture. I think content moderation is extremely important. In the past, especially in the Ethereum ecosystem, many people felt that the environment at Pump.Fun was offensive, partly because of some events that happened in November 2024. I want to make it clear that we have implemented content moderation from the beginning. For example, when we launched the live broadcast feature in June 2024, many users began to live broadcast their tokens. This behavior was harmless and we thought it would be fun to support this feature internally.

However, six months later, users began to question why we were building these features, as the usage of live streaming was very low at the time. But in October and November, as the market was hot, live streaming suddenly became very popular. I remember that in just a few days, the number of live streaming sessions surged from 10 to thousands per day. Before that, Andrew Tate had traded tokens in live streaming, and the entire market was experiencing a shock. When everything happened at the same time, the craziness of cryptocurrency was really incredible. I regret that we were not transparent enough in content moderation, which led many people to mistakenly believe that we had no regulatory standards. In fact, we have always implemented content moderation, but we may not have communicated this well.

As for the aesthetics of 4Chan, I don't think it's a hindrance to our ability to grow in a healthy way. I believe that anything culturally significant, especially contentious content, is always exploring the boundaries of what's acceptable and what's not. But we make sure to draw a clear line and make sure no one crosses it.

Content review by Pump.Fun

David:

I had no idea that Pump.Fun had any form of content moderation. I always thought that with 60,000 tokens being launched every day, that was too large to be moderated. Perhaps you could give us a quick overview of how this moderation system works? How do you manage moderation at such a large scale? I know not all 60,000 tokens have live streaming, so could you share how the moderation system works?

Alon:

Yes, it’s actually probably over 60,000, closer to 80,000 tokens being launched every day, which is crazy. But there are a few things to note here.

First, when a token is launched on the blockchain, its metadata is immutable. Most of this data is interacted with by users through front-end interfaces like Pump.Fun, or other similar websites. I don't know if other websites are audited, but Pump.Fun does attract a lot of traffic from users who want to interact with these tokens.

The challenges of content moderation are similar to those of social media platforms. With such a large number of tokens coming online every day, it is indeed difficult to manage, but it is not impossible. Social media platforms generate a lot of content every second. Although this is different from text-based platforms such as Twitter, we also adopt a similar approach: a combination of automated moderation systems and user reporting mechanisms, supplemented by manual review. A special challenge for Pump.Fun is that, especially in the field of Memecoins, users are very keen to participate in new tokens as early as possible. Therefore, many users like to check out tokens that have just been launched, which means that we have little time to conduct adequate moderation. Considering that tens of thousands of users are viewing new tokens in real time, we must react within milliseconds. Therefore, we rely on automated moderation systems and devote a lot of resources to manual review. Together, these two form the moderation mechanism on the front end of Pump.Fun. Of course, this is not perfect, because users can also access tokens through other front-end platforms. If those platforms are not conducting moderation, it may cause problems.

David:

I think the mechanics of Memecoins are interesting because they incentivize user behavior, both good and bad. For example, the removal of the live feature, I think is a good example. When the live feature was launched, some ridiculous things did happen, which were funny but ridiculous. And then it developed to more extreme situations, such as developers taking fentanyl during live broadcasts and pretending to be dead, which was probably the worst scenario. In the end, you decided to remove the live feature, which effectively curbed these crazy behaviors. To me, this shows that Pump.Fun has the ability to guide user behavior through mechanism design. This ability comes from your traffic, users, and brand influence.

Do you have any other mechanisms or methods to guide users in a more sustainable direction?

Alon:

In permissionless systems, it is indeed difficult to completely suppress bad behavior. The behavior on the chain is open and immutable, which means that anyone can access these systems and try to exploit them. However, in many cases, the role of the social layer is to incentivize positive behavior. I think this can be achieved by guiding users to pay attention to positive content and rewarding these behaviors. Ultimately, the essence of Memecoins is a "tradable unit of attention" and their value is closely related to the attention given by users. If we can guide users to focus on positive things, we can incentivize more good behavior instead of negative behavior. Of course, in permissionless systems, it is almost impossible to completely eliminate bad behavior, but we can focus attention in a more positive direction through mechanism design.

For example, many people have a negative view of AI-related tokens, thinking that they are just chasing hot spots, but in fact, some projects are actually building real products. For example, Griffain is a very interesting project that is developing an application similar to ChatGPT to interact with the Solana blockchain. When communicating with the founder, I found that his original intention was not to hype, but to attract attention by issuing tokens and promote the actual development of the project. If such a token can successfully attract users' attention, people will start to use the product, and the subsequent development will be a natural progression.

Of course, most projects will eventually fail because they fail to find market fit. But being able to quickly validate an idea with a token is a big opportunity. We hope to see more of this and will work hard to reward projects that attract attention by building actual products. My co-founder and I have also tried to launch MVPs (minimum viable products) in the past, so I understand this need very well. If you can quickly test the feasibility of an idea by issuing a token, it will greatly improve efficiency.

However, there are also many people who are hesitant to do this because of reputation issues. I completely understand this. They don't want to be seen as people who profit from tokens. This is why we need to explore other monetization paths, such as designing the platform or protocol so that projects can achieve profitability even without selling tokens. I think this is very critical. So this discussion comes back to how to incentivize good behavior through the social layer and how to optimize incentives at the protocol layer.

Pump.Fun’s success

David:

After the success of Pump.Fun, a number of similar token launch platforms have emerged in the market, but none of them have been able to achieve the same level of success or virality as Pump.Fun. Why do you think this is? What are the key factors that Pump.Fun has that other platforms cannot replicate?

Alon:

I think it comes down to the fact that the switching cost of open systems is very low. It is much simpler for users to migrate between these platforms than Web 2 or the traditional financial system. Therefore, I think the success of Pump.Fun is mainly due to the advantages of our products. We always listen to user feedback, continue to iterate, and launch features that really meet user needs. We welcome competition because it is good for users. At the same time, we also pay close attention to market dynamics. I think there are indeed some good competitors in the market. Although they may not be as attractive as us at present, there are also some good ideas and exciting trends emerging. In the end, users will choose the best products. So we believe that as long as we continue to improve and optimize, the market feedback will eventually stand on our side. Judging from the performance in the past year, the market has proved this. Therefore, I think the answer is actually very simple.

David:

How each team uses their funds is their own business, but I think many people will expect me to ask this question. It is estimated that the Pump.Fun platform has accumulated about $600 million in funds for the team, investors, or a combination of both. The profitability of $600 million should be among the best in crypto projects, especially for a project that was launched in 2024. What is this money mainly used for?

Alon:

We reinvest all the money to build better products. For example, we use it to expand the team. We are currently around 45 to 50 people, and just six months ago, we had less than 20 people . At that time, the team was mainly engineers, and now we have added data scientists, machine learning engineers, and security experts. Our team is still expanding to provide users with the best experience.

David:

Do you allocate funds to investors? I remember you did a seed round, right?

Alon:

Pump.Fun did take some investment in the early days, but we are pretty much completely self-funded now. To some extent, I also believe that people who work hard should enjoy the fruits of their labor. But as I mentioned before, our goal is always to look to the future and build a product that can withstand multiple market cycles. It would be very disappointing to look back in a few years and find that this was just a flash in the pan. I think that would show that we didn't really realize long-term value.

PumpSwap

David:

Next, let's talk about one of your new products, PumpSwap. This is Pump.Fun's native DEX and the second product you've launched. Previously, Pump.Fun operated in a way that any Memecoins with a certain market value would migrate to Radium. Radium is an automated market maker (AMM) on Solana, which can be said to be the "Uniswap" of Solana. Once tokens migrate to Radium, they become part of the Radium ecosystem, and Radium has accumulated a lot of fees. Due to the success of Pump.Fun, Radium's trading volume has increased significantly and its token price has performed well. It can be said that the success of Pump.Fun has not only driven the growth of Radium, but also increased the activity of the entire Solana ecosystem, even including Solana's own assets. For example, why would a celebrity like Donald Trump launch Memecoins on Solana? The reason behind this is that Pump.Fun has led the craze for Memecoins.

And now, you have launched PumpSwap as the native decentralized exchange of Pump.Fun. This means that you have replaced Radium with your own AMM, making the Pump ecosystem more verticalized, which is my understanding of the current situation. At the same time, can you talk about the strategy and vision of PumpSwap?

Alon:

Your understanding is completely correct. Pump Swap is the native decentralized exchange of Pump.Fun. There are two main reasons why we launched Pump Swap, which actually brings great value to users.

First, the current trading process is still too complicated. We are committed to creating a simple on-chain trading experience that can be easily participated by thousands or even millions of users. Users do not need to understand the specific process of migration, bonding curves, or how AMM works. We want users to only focus on the core questions of trading: Is this interesting? Does this create value for me or others?

To achieve this, we have taken some steps to reduce friction in the trading process. For example, previously during the migration process, Pump.Fun would extract about 6 Solana from the bonding curve for liquidity pools, tipping, etc., and the remaining amount would be the protocol income. Now, this part of the fee has been completely eliminated and has become zero. With this adjustment, we hope to make the trading process smoother while aligning with the interests of users. By reducing transaction fees, we are able to obtain stable income when the token is successful without affecting the user experience due to high fees.

Therefore, we want to eliminate the need for these complex concepts. For example, previously during the migration process, Pump.Fun would extract about 6 Solana from the bonding curve for liquidity pools, tipping, etc., and the remaining part would be the protocol income. Now, this part of the fee has been completely eliminated and has become zero. With this adjustment, we hope to make the transaction process smoother while aligning with the interests of users. By reducing transaction fees, we are able to obtain stable income when the token is successful without affecting the user experience due to high fees.

Another aspect of PumpSwap is the concept of aligning token creators and holders. In short, our goal is to incentivize higher quality tokens and content, creating a product that can truly last. In order to achieve this goal, you need to continue to grow, and the way to grow is to attract content creators from other areas of the Internet. You need to make it easy and rewarding for them to participate. They don't necessarily need to invest money, and they don't have to worry about reputation issues. Creator fees and revenue sharing play a vital role in this process.

Another aspect is that we want the market to be experimental, and we want to offer users other types of assets and tokens to trade in. We are working with about 15 to 20 partners, 10 of which are bridging their tokens from other blockchains to Solana for the first time and creating liquidity pools here.

We hope that through these attempts, users will have the opportunity to explore more types of assets, not just Memecoins. Although this may not bring disruptive changes in the short term, I believe it is an experiment worth looking forward to.

We have maintained close communication with many users. I think people do have the desire to explore more things, but many users are not paying attention to these changes every day. For the core members of the crypto community (Crypto Twitter), they may spend 16 hours a day in this small circle, but in fact, many users who use Pump.Fun don’t even know what CT is, and don’t even have accounts on centralized exchanges, so they naturally can’t get in touch with these new projects. Therefore, we hope to bring these assets to them in a simple and convenient way.

Although I don’t think this will bring disruptive changes in the short term, it is an experiment worth looking forward to. I believe that many users will be interested in exploring these assets and take this opportunity to gain a deeper understanding of the crypto world, not just Memecoins. This is exactly the core direction of PumpSwap.

David:

My current understanding of PumpSwap is that it uses a fixed x*y=k automated market maker (AMM) model similar to Uniswap V2. Uniswap V3 brought innovation through a centralized liquidity model, but you chose a more basic fixed curve model and did not use centralized liquidity. Can you talk about why you made such a design choice? After all, there are many cutting-edge explorations in the current AMM design field, and you seem to prefer traditional methods. Please also share PumpSwap's considerations on AMM design and possible future development directions.

Alon:

My point is that if a model has been proven to be effective, there is no need to change it easily. Obviously, the bonding curve model of Uniswap V2 is almost optimal for long-tail assets (such as Memecoins).

Of course, there may be some innovative ways in the future. When these tokens are successful, liquidity will gradually increase, and people may start using centralized liquidity AMM models, or even trade on order book exchanges (mainly off-chain, sometimes on-chain). So I think this is a direction that can be explored in the future.

But for now, we've seen Memecoins achieve significant success under the Uniswap V2 model. I don't think it's necessary to be too experimental with the AMM model. Instead, we'd rather experiment more with incentive mechanisms to better align the interests of creators and users rather than making drastic adjustments to the AMM model.

Creator Revenue Sharing

David:

I want to touch on your mention of creator revenue sharing. We’ve talked about this topic before, but I think it’s important enough to explore again. If Memecoins is going to start a new chapter, I hope it will be centered around this mechanism.

What I see here is that the core of creator revenue sharing is to allow token creators to earn revenue through trading volume, rather than relying on selling tokens to make a profit. In the past, Memecoins creators usually made money by selling tokens. However, this approach is completely inconsistent with the interests of investors who buy tokens later. Because early holders usually have a strong motivation to sell tokens, this often leads to some irresponsible creators taking rug pull actions, that is, suddenly selling all tokens at a high price, or designing scams to defraud investors of funds. These actions will directly lead to a sharp drop in token prices, the end of the project, and investors can only find other ways out.

Based on the idea of ​​creator revenue sharing, token creators can theoretically not even hold any tokens at all. Their main source of income is fees generated by transaction volume, rather than relying on token appreciation. When creators are incentivized by transaction volume, their interests are more aligned with the interests of token holders. Because when the value of the token rises, the transaction volume will also increase, thereby increasing the income of the creator. This mechanism helps transform Memecoins from a simple financial asset to a project with long-term growth potential.

For example, a creator can develop himself into a commercial entity, even if he only completes personal creations through the Internet. I think this fits well with the concept of "creator economy" that we heard in 2021. Although the concept was still in the theoretical stage at that time, now we see that it has the opportunity to become a reality. This mechanism may become a new tool for creators to achieve commercialization in the future. Of course, no similar mechanism has been really proven to be effective yet, but I am optimistic about it. Do you agree with this view? If you have a different point of view, how would you adjust this mechanism?

Alon:

I couldn't agree more with you, and you've summed it up really well. I think we're still in the experimental phase of figuring out how to really attract content creators, or any type of creator, into crypto and retain them in a sustainable way that's not only good for the creators, but also for the token holders, the traders, and the entire ecosystem.

Although this mechanism still needs time to be verified, I am full of expectations for it. This is a brand new attempt and an exciting experiment. Let us wait and see whether it can bring a win-win result for creators and investors.

Pump.Fun vs Radium

David:

I would like to quote a tweet from a Radium contributor, who mentioned that Pump.Fun plans to create its own AMM (automated market maker) to replace Radium and build a complete vertical ecosystem. He sent two tweets in February, in which he mentioned: "While the Pump platform itself is impressive, it remains to be seen whether the new and untested AMM can bring significant network effects. Radium will continue to support many teams to build protocols that would not otherwise be possible. I think it is a strategic misjudgment for Pump.Fun to completely replace Radium with its own AMM, underestimating the key role that Radium AMM plays in its liquidity enablement function." What do you think of this as a core contributor of Radium?

Alon:

I don't agree with that. If Pump.Fun wants to build its own token launch platform or other features, we completely welcome that. We want to see more people experimenting with new models and features. Ultimately, I think verticalization is an important part of this. So what does verticalization bring? It allows us to experiment internally without having to rely on third parties.

I feel happy every day because I think our team is one of the best in this space. We are able to deliver products quickly and iterate quickly based on user feedback. I noticed that many other teams do not have the same focus and efficiency on user experience and product delivery. We don't want to rely on third parties because it will limit us in delivering products. With PumpSwap, we are able to fully control our own ecosystem and take on the corresponding responsibilities. Of course, this also means that if we fail, people will choose other platforms, which will be fatal to us. But I think we are willing to take such risks.

David:

Recently, Radium announced that they will be launching a token launch platform similar to Pump.Fun, I remember they named it Launch Lab.

Alon:

I've heard about it. I'm looking forward to seeing what new ideas they'll come up with. Let's wait and see. But in any case, we are not afraid of any form of competition.

David:

Does this mean that the competition between Pump.Fun and Radium will escalate into a "dispute" or is it possible that you can find a way to cooperate?

Alon:

I don't think of this as a dispute. I think it's just part of the business trying to provide the best product for the end user. This isn't just Radium, there are many other platforms out there, no matter what they're called. In fact, a lot of innovative platforms in the Ethereum ecosystem and other areas have borrowed some of the ideas from Pump.Fun and iterated on them.

Ultimately, I think Pump.Fun has designed a very clever token launch mechanism. But it’s important to acknowledge that a lot of these ideas actually come from existing protocols and projects. If Memecoins can start a new chapter, I think the potential for on-chain token generation will become even richer.

There is still a lot to do in the future. I think it is inevitable that multiple different market segments will emerge, and these markets will need their own mechanisms to meet their needs. This is the inevitable trend of industry development. As a protocol, Pump.Fun hopes to be as general as possible and cover more market segments at the same time. But we also know that we can't cover all markets. Therefore, I am looking forward to seeing the new mechanisms proposed by other teams. If any of them achieve great success, we will also be happy to explore the possibility of cooperation.

The social element of Pump.Fun

David:

The cryptocurrency space is inherently very social, and this trait permeates the entire ecosystem. We exist as “tribes” that gather on Crypto Twitter to chat, discuss, and even create some drama. Almost everything related to cryptocurrency has some kind of social element. I’ve noticed that Pump.Fun’s live streaming feature has done a great job of this, and the social component works really well in the crypto space. So, can you talk about the social elements that are coming to the Pump.Fun tech stack? How do you plan to integrate these social features into the future development of Pump.Fun?

Alon:

I think this is what made Pump.Fun different from the beginning. We paid great attention to the design of social attributes, rather than simply copying financialized platforms like Deck Screener (a platform that displays token information from a financial perspective) and listing tokens. From the beginning, we believed that the direction of the project should be to create a social experience rather than a pure financial tool.

The reason why social is so important is that it not only brings entertainment, but also provides value to users. I think a lot of people have a misunderstanding about Memecoins. If you talk to users, especially those who don't spend 16 hours a day on Crypto Twitter, you will find that many of them are not in it for the money. They are more concerned about "this looks fun and I want to try it with my friends." It's that simple. I know some people may not believe this and even find it incredible, but if you really understand the users, you will find that this mentality is very common.

Therefore, we want to further strengthen this and create a better and more entertaining experience. This is why we call Pump.Fun "the largest social network in the crypto space". We believe that starting with some basic and simple functions, if we can continue to focus on social attributes, we can develop the platform into a great project with more possibilities.

I would also like to emphasize that as the user base of Pump.Fun continues to grow, there may be tens of thousands or even millions of people using it every day in the future. These users will gradually explore more features, such as DeFi (decentralized finance), deep trading functions, stablecoins, etc. This is an inevitable trend and also the way we cultivate future "crypto natives" (people who fully adapt to the crypto ecosystem and use it as their main economic activity).

That’s why we’ll continue to focus on creators’ needs and develop more social products. We recently launched a private messaging feature and plan to iterate on it. While we usually keep a certain level of confidentiality about future feature plans, I can say that there’s a lot to look forward to in the future of Pump.Fun.

Content, Attention and Market

David:

I think there are some interesting intersections in the verticals of content markets, news, and tokens. In some cases, markets and tokens can even merge into one. For example, on Polymarket, you see a direct connection between news events and markets - news coverage drives the formation of related markets. In Polymarket, there are markets around many potential events, and this mechanism is very complex, and I noticed that Pump.Fun seems to be moving in this direction.

However, I think the final form of this combination has not yet been fully presented. There are some vague but shared value connections between news events, markets, content, and attention. I think Pump.Fun is one of the platforms that is currently closest to this core of value. I would like to hear your opinion. When you observe the combination of news content, attention and market, where do you think its potential lies?

Alon:

I'm glad you mentioned Polymarket. I think of Polymarket as a "truth-seeking market" that predicts or verifies the authenticity of events through market mechanisms. Pump.Fun is more like an "attention-seeking market" and is a very good attention measurement tool. Because here, for the first time, you have a clear indicator to measure the popularity and trend of certain topics.

For example, when a political event occurs, you can not only predict the probability of its occurrence through the market, but also intuitively understand its influence and relevance through the trading volume, market value and charts of tokens related to the event. This is a completely new perspective and very interesting.

What is unique about Pump.Fun is that whenever there is a major news event, someone will create a token based on it. You can say that the news is unfolding on the blockchain almost in "real time". This phenomenon is very fascinating. Although I can't fully predict how it will develop in the future, I believe it has great potential.

It is important to note that not all news events or social media content can be converted into economic value, after all, the global attention resources of people are limited. But for those events that can successfully attract a lot of attention, we can quantify their value through token transactions and market performance. There are great possibilities behind this mechanism, and I think there are important opportunities here.

The Future of Memecoins

David:

What do you hope the future of Memecoins will look like? What specific expectations do you have for it? What do you think its actual development will be like?

Alon:

That's a very good question, and I need to be careful not to be too idealistic in my answer. We have always aimed to be down-to-earth and focus on what is actually happening and what is possible.

I hope the narrative of Memecoins shifts and people stop thinking that trading these tokens on-chain is a worthless or nihilistic act. I have never been a believer in the term "financial nihilism". I think it is just an excuse on Crypto Twitter to rationalize the current state of the market. At the end of the day, people trade and create these tokens because they obviously have financial value. But that financial value often exists because they have value in other ways, such as being entertaining or attracting attention to a new product. I hope to see more positive examples like this in the future, while reducing the negative events that disappoint people and promote more responsible behavior. I think this is where Pump.Fun needs to play a more proactive role.

This actually involves shaping the culture of the community from the top down. I think this is critical. At the same time, we also need to moderate and guide the content on the platform to create a more sustainable user experience that people are willing to come back again and again. Maybe this experience will not necessarily be as crazy as it was last November or January this year, but if we can build a product that a large number of users are willing to log in every day and feel satisfied, that is success. I think this is what we are striving to achieve in the long run.

Are Memecoins evil?

David:

At present, some listeners may be resistant or even hostile to the concept of Memecoins. Especially in the current market environment, they believe that Memecoins are essentially unable to create value and are just a speculative casino. Market performance seems to support this view.

According to data from Roadblock Changes since January 14, 2024, Pump.Fun has launched over 8.7 million tokens and has generated $600 million in cumulative revenue. Currently, only four of the tokens released by Pump.Fun have a market cap of over $100 million. Therefore, I think people feel a discrepancy when they see Pump.Fun's $600 million in revenue and the total market cap of all Pump.Fun tokens, which is between $400 million and $600 million.

If someone argues that Memecoins are essentially worthless and are just a speculative casino, then this view seems to make sense at this stage of the market. How do you respond to this view? Alternatively, what do you think of those who believe that Memecoins are just a short-term speculative tool?

Alon:

First, when the market as a whole drops by more than 50%, many views seem to be validated. For example, the price of Solana has dropped by more than 50%, and the prices of Ethereum and Bitcoin have also fallen sharply from their historical highs. Therefore, whether it is Memecoins, NFTs, DeFi or other Altcoin, they are all risky assets. If the entire market is plummeting, then Memecoins will not be immune.

But what's interesting is that few people mention another fact: the cumulative market capitalization of Pump.Fun tokens was about $8 billion last November, and the market environment at that time was completely different from now. Obviously, this difference is very large. Because these tokens are high-risk assets in themselves, no one denies this. But I think that people who criticize Memecoins now ignore an important aspect, which is that the behavior and experience of the current user base is actually quite sticky.

If you are a crypto user today, your likelihood of trading Memecoins on Pump.Fun is the same as it was a few months ago. The only difference is that there are fewer crypto users now, but those who remain are still repeating the same behavior patterns they did a few months ago. I don’t think this will change easily.

This is actually part of the natural evolution of Memecoins. Memecoins have to evolve to adapt to the market needs, and we want to be part of that evolution. But ultimately, the market will answer. It may be Pump.Fun, it may not be, but I believe Memecoins will continue to exist in some form because they do provide some value to users. It will take time to prove this.

Even if you look at NFTs, although their prices have dropped significantly compared to the last bull run, many NFT collectibles are still highly valuable, such as Pudgy Penguins, which still has a market value of hundreds of millions or even billions of dollars. Therefore, it is inaccurate to think that these assets are worthless because the bubble burst. Even if they have not reached historical highs, they still provide real value to users.

Even if you look at NFTs, of course, they're down significantly from the last cycle, a lot of NFT collectibles are still very valuable, with market caps still in the hundreds of millions or even billions of dollars. So, it's not necessarily true to think that they're worthless because the bubble burst. Like, Pudgy Penguins, aren't they valuable? That would be crazy. And again, while it may not be at all-time highs, it still provides a lot of value.

So, let's wait and see. I'm not sure if Memecoins will survive for ten years, but I want the audience to think about a question: why did things suddenly change when user behavior was consistent for many years? At the same time, I also want to extend an invitation to everyone who has not tried Pump.Fun yet, especially users in the Ethereum community. I suggest you spend an hour to experience it. I believe many people will change their minds about it. Crypto Twitter's views are often too one-sided, and the reality is much more complicated than they describe.

Pump.Fun's Mission

David:

What do you think is the mission of Pump.Fun? Is it to promote the issuance of more tokens, increase trading volume, or help users achieve wealth growth? How would you define this mission? What is the core guiding direction for you?

Alon:

I think these goals are actually closely linked. Trading volume is obviously a very important metric, and I think it can serve as our core guidance because it directly reflects the activity and user engagement of the platform.

Similar to other blockchains, it is not easy to determine the core metric to focus on. But in recent years, people have paid more and more attention to revenue (Rev) because it represents the real economic value created. I think we should also pay attention to the economic value that users bring to the platform in the long term, which may be a more profound metric. Beyond that, I think these different goals are highly correlated. Although many people think that an increase in the number of tokens is a bad thing, I have always believed that more tokens are essentially a good thing.

We need to incentivize users to produce high-quality content and follow good behavior norms through mechanism design. I think this is a relatively missing part, and some future features will focus on solving this problem. If we can lower the barrier to entry for the market and make it easy for more people, especially those who are not currently in the ecosystem, to participate, we can greatly increase positive market activity. For example, if the cost of token creation is reduced from 20 Solana to 10 Solana, this will undoubtedly attract more projects and users.

I think the ease and low cost of token creation are very important. The growth of user wealth is also crucial. According to the data, when the market is hottest, the transaction volume reaches the peak, the user participation enthusiasm is the highest, and everyone's evaluation of Memecoins is the most positive.

Ultimately, Memecoins is a market-based system, so when risk asset prices fall, we have limited ability to do anything. But we can focus on building a product that is stable and grows sustainably over the long term, ensuring it provides value to users one to five years from now.

Therefore, we should not be too concerned about the market fluctuations that occur every day, but instead need to look at t