Pump.fun, a platform dedicated to launching memecoins, has introduced an incentive that rewards creators with 0.50 SOL (approximately $80) if their tokens successfully list on Raydium, a Solana-based decentralized exchange (DEX). This reward is given once the tokens complete their bonding curves, offering a new way for users to benefit from their creations.
Free Token Creation on Pump.fun
Pump.fun has made it easier for users to create new tokens by waiving the initial $2 creation fee. Now, the first buyer of the token pays this fee instead. This change makes it possible for someone to create a coin without having to purchase any of its supply, enhancing accessibility for creators.
Bonding Curve Mechanism of Pump.fun
Pump.fun utilizes a bonding curve mechanism for launching and trading tokens, which ensures fair access to new coins. Unlike traditional trading platforms that rely on order books, this method:
- Sets prices based on a predefined mathematical formula.
- Increases the price of each token as more are purchased.
- Creates a liquidity pool once a token reaches a market cap of $69,000, qualifying it for listing on Raydium.
Once listed on Raydium, the liquidity provider (LP) tokens are automatically burned. This process locks the liquidity, ensuring that tokens cannot become entirely illiquid, even if prices drop significantly.
Challenges and Success Rate
Despite these opportunities, Pump.fun has a low success rate, with only 1% of tokens reaching the Raydium listing milestone. However, for those who do, the new reward offers additional incentive to create and promote tokens on the platform.
Pump.fun’s Revenue Milestones
In May 2024, Pump.fun became the second-largest revenue-generating platform in crypto, bringing in $3.38 million over a single week. By July, daily revenues frequently exceeded $1 million, contributing to a cumulative total of $87.2 million in earnings.
