In the volatility of the cryptocurrency market, Pump's token issuance plan has sparked widespread discussion.
This meme launch platform plans to raise $1 billion at a fully diluted valuation (FDV) of $4 billion, selling about 25% of the tokens.
In the face of a depleted market, is this move a savior for the market or a liquidity killer?
Pump's valuation logic
Pump's valuation has sparked divergence in the market. According to publicly available data, as of May this year, Pump's annual revenue totaled $296 million, equivalent to an annualized revenue of about $710 million.
According to traditional valuation methods, the price-to-sales ratio (P/S) is 5.63, similar to other DeFi projects.
However, the valuation of the meme market relies not only on revenue but is more influenced by market sentiment.
Compared to Circle's USDC business, Pump's valuation seems overly high, especially considering its revenue volatility.
The frenzy and fatigue of the market
Pump's token issuance plan has triggered both frenzy and fatigue in the market. While the platform's ability to attract capital is promising, the $4 billion valuation raises questions about its rationality.
The cyclical and sentiment-driven characteristics of the meme market make revenue unstable, and the market's thirst for new narratives further exacerbates this uncertainty.
The last cut in a depleted market?
With the evaporation of the meme market's market capitalization and the shrinkage of trading volume, whether Pump's token issuance plan can become a savior for the market remains in doubt.
The platform's past behavior, including selling earned SOL for USDC, has affected community confidence. Researcher Haotian pointed out that Pump's valuation surpasses most DeFi blue-chip protocols, which may signal the maturation of the meme economy or a decline in industry values.
What about the future?
What Pump will do after token issuance, and whether it can bring a substantial gameplay upgrade to the meme market, is the focus of market attention.
Under the challenges of new launch platforms, whether Pump can maintain its position or will become the last cut remains to be seen. Until the answer is revealed, the market's cautious attitude may be a wise move.