Sold out in 12 minutes, the public sale of $PUMP tokens sparked a market frenzy.
The meme coin launch platform pump.fun, which has attracted attention in the Solana ecosystem, set an astonishing record during its initial coin offering (ICO) held on Saturday, raising $500 million in just 12 minutes. This public sale issued 125 billion $PUMP tokens, priced at $0.004 each, implying a fully diluted valuation for the platform of $4 billion.
According to Arkham Intelligence data, the $PUMP token public sale sold out in less than a minute after it started, indicating extremely strong market demand. As many as 189 on-chain wallets contributed to the maximum allocation limit of $1 million. This public sale occurred simultaneously on several major exchanges, including Bybit, Kraken, KuCoin, Bitget, MEXC, and Gate.io.
The pump.fun team stated that the purchased tokens will be distributed to users' wallets within 48 to 72 hours in the future, but they will remain locked and cannot be traded or transferred until the distribution ends. The team announced the official Solana contract address and warned users to avoid purchasing counterfeit assets.
In terms of token distribution, this ICO plans to sell 33% of the total supply of 1 trillion $PUMP tokens, with 18% already allocated through private sales. The public allocation has been reduced from the original plan of 15% to 12.5%. Other distributions include 20% held by the team, 24% for community and ecosystem incentives, 13% for existing investors, 2.6% for liquidity support, and 2.4% for the ecosystem fund, with the remaining portion allocated for foundation funds and live incentives.
Source: pump.fun $PUMP token distribution.
The decline in platform activity has raised concerns, and the token issuance has become a turning point.
Despite the tremendous success of the $PUMP token public sale, the activity data of the pump.fun platform itself shows a declining trend. According to DeFiLlama data, the platform's launchpad trading volume exceeded $11.6 billion in January but has dropped to $3.65 billion last month. Similarly, the revenue generated by the launchpad has decreased from $133 million at the beginning of the year to nearly $34 million last month.
Source: DeFiLlama, the activity data of the pump.fun platform itself shows a declining trend.
However, the decentralized exchange PumpSwap, launched by pump.fun in March, is compensating for this downward trend. According to DefiLlama data, the exchange recorded $14.3 billion in trading volume in May, down from $10 billion the previous month. Correspondingly, PumpSwap's revenue for these two months was $7 million and $5 million, respectively.
Source: DeFiLlama, the decentralized exchange PumpSwap launched by pump.fun in March is compensating for this downward trend.
This token issuance may symbolize the return of the meme coin industry, which experienced a sharp decline after becoming one of the best-performing asset classes in 2024. The public token sale also heralds a revival of initial coin offerings, which had waned during the tenure of former SEC Chairman Gary Gensler due to regulatory pressures.
Market reactions are polarized, and experts recommend cautious investment strategies.
The cryptocurrency community's reaction to the sale of $PUMP tokens and the pump.fun platform shows a clear divide. Haseeb Qureshi, managing partner at venture capital firm Dragonfly, stated, 'Besides being one of the largest ICOs ever, this will become one of the highest-grossing tokens in the cryptocurrency industry.'
However, Mary Bent, founder of Truth for the Commoner (TFTC), holds a different view, responding that 'pump.fun and its supporters, even from a distance, are leading Generation Z toward destruction.' Coinbase product manager Conor Grogan pointed out that the tokens launched on platforms like pump.fun are 'mostly' created by automated bots.
Cryptocurrency strategist 0xSun proposed a balanced hedging strategy for $PUMP token investors. He noted that although venture capital firms invested $720 million at a $4 billion valuation, indicating institutional confidence in its fundamentals, success is not guaranteed. 0xSun advised investors to watch the pace of the public sale, suggesting participation if the ICO sells out quickly, but to hedge positions to reduce risk.
Source: X, 0xSun proposed a balanced hedging strategy for $PUMP token investors.
According to trading data from the Hyperliquid perpetual market, the $PUMP token has risen 16% in pre-market trading, with the current trading price at $0.006725. However, analysts warn that a price correction may occur when formal trading begins. The on-chain analysis platform Spot On Chain pointed out that ICO participants can achieve low-risk returns by shorting in pre-market and covering their positions upon receiving tokens.
It is worth noting that the Bybit exchange experienced an 'unexpected API delay' that led to the token being oversubscribed, resulting in some users not receiving allocations. The exchange stated it would fully refund users who did not receive allocations due to the API delay. The explosive sale of the $PUMP token reflects the market's ongoing interest in meme coins and emerging DeFi projects, while also highlighting the importance of cautious strategies for investors facing highly volatile assets.
Further Reading
Pump.fun is contradicting itself across time and space! Once called pre-sales scams, now the pre-sale of PUMP has sparked controversy.
The article titled 'PUMP Token Public Sale Sells Out in Seconds! $600 Million Raised in 12 Minutes, What Market Signals Does This Reveal?' was first published in 'Crypto City'.
