Seeing Pump.fun planning to raise 1 billion dollars with a valuation of 4 billion dollars, I have mixed feelings. It is hard to imagine that a MEME launching platform has a valuation that surpasses most DeFi blue-chip protocols. Is such a sky-high valuation reasonable? Here are a few viewpoints:
1) The inflated and bubble-like market valuation is quite unreasonable.
From the data, it can be seen that Pump.fun is indeed the biggest beneficiary of this round of MEME supercycle, with monthly revenue peaks reaching tens of millions of dollars, a phenomenon that is exceptional even in traditional internet.
However, Pump.fun's attention economy business model relies on the short-term irrational products of market MEME coins' high FOMO. In other words, it is driven by 'gambling' to monetize traffic. This means that Pump.fun's business model monetization ability is entirely a product of the short-term spotlight effect in the market, rather than a sustainable normalized profit logic.
Based on this, is the valuation of 4B reasonable? This pricing far exceeds that of most DeFi blue-chip protocols, making it hard to imagine a platform that is mocked for harvesting users would have a valuation crushing blue-chip innovative protocols. Once the MEME craze recedes or the market returns to rationality, Pump.fun's revenue model will instantly collapse. So what exactly is Pump.fun pouring into the market at this moment when the MEME trend is cooling?
2) A fragile business moat is easily surpassed.
The success of Pump.fun seems accidental but is actually inevitable. It has seized the technical dividends of Solana's high performance + low cost, as well as the era dividends of MEME culture moving from niche to mainstream.
But how deep is this 'first mover advantage' moat? Technically, similar token issuance platforms can be quickly replicated; operationally, MEME launching platforms are essentially traffic businesses, and once the hot topics shift or regulations tighten, the cost of user migration is extremely low.
More critically, Pump.fun is highly dependent on the Solana ecosystem. Once there are significant changes in the Solana ecosystem, the vulnerability of its business model will be exposed. This business model, built on the infrastructure of others, is fundamentally a 'dependent business', not to mention it has extreme unsustainability. How can it support an independent valuation of 4B dollars?
3) The tool-like attributes of Launchpad are difficult to form an ecosystem.
Currently, Pump.fun is merely a 'token issuance tool', and to support a market valuation of 4B, at least a large MEME economic ecosystem is needed. Knowing it is unachievable yet insisting on doing so, it is hard to imagine what the 1B dollar financing scale is aiming for.
Unbeknownst to many, transforming from a pure Launchpad into a complex MEME economic ecosystem entails a paradox: the core of MEME culture is precisely simplicity, directness, and viral spread; excessive functional stacking will only cause the platform to lose its original 'wildness'.
In fact, balancing the 'short and quick' characteristics of MEME with the long-term value accumulation of the platform is challenging. Those products attempting to evolve from tools to platforms often lose themselves in the pursuit of being 'large and complete', ultimately becoming something that is neither here nor there. With 1 billion dollars in hand, Pump.fun is likely heading towards such a fate.
4) Extremely high valuations will disrupt the original value innovation system.
The extremely high valuation of Pump.fun sends a dangerous signal to the entire industry: in the current Crypto ecosystem, the value of 'traffic aggregation + speculative monetization' may surpass 'technological innovation + infrastructure'. One must ask, when creating gambling platforms is more profitable than promoting technological innovation, who would still chew on the hard bone of infrastructure? It is hard to imagine what kind of disastrous industry chain reactions this new value orientation will generate.
On one hand, more capital and talent will flow into MEME-related infrastructure construction; on the other hand, it may exacerbate the trend of 'entertainment' in the industry, marginalizing true technological innovation.
Overall, the issuance of tokens by Pump.fun is both a mark of the maturity of the MEME economy and a potential signal of the industry's value collapse.
The key lies in whether it can build a sustainable business moat after obtaining huge capital; otherwise, such an abnormal valuation could bring tremendous innovation disasters to the entire industry, heralding a more utilitarian, shortsighted, and further away from the tech geek essence of Crypto future.
