The Pump.fun (PUMP) platform recently successfully completed an initial coin offering (ICO), reaching a valuation of $4 billion. However, this valuation has raised significant doubts about its legitimacy.
According to the analysis, the PUMP token lacks any economic benefits. It primarily relies on media publicity for the brand, which has led many to view it as a way for the team to raise funds, rather than an effort to build a platform.
Disadvantages of PUMP ICO
In a recent report, BitMart Research noted that Pump.fun, despite being an industry leader at one time, faces serious doubts about its $4 billion valuation, especially with its declining market share and intensifying competition.
The report highlights the lack of governance rights, revenue sharing, or practical benefit for the PUMP token, relying entirely on brand momentum to maintain its value. This weakness has led investors to question its sustainability.
According to BitMart, 33% of the total supply was allocated for a fundraising event at a price of $0.004 per token, with all tokens available at launch. This resulted in selling pressure reaching $1.32 billion.
Moreover, the launch of the PUMP token by Pump.fun came amid weak market sentiment and declining liquidity on the chain.
The account X, TheCryptoProfes, stated that Pump.fun allocated $800 million worth of tokens to the team, equivalent to 20% of the total supply. This large allocation to the team could lead to significant selling pressure, threatening liquidity and investor confidence.
TheCryptoProfes commented: 'An allocation of $800 million... This is the largest allocation to a team I have seen in a pre-sale, with the highest launch valuation ever. (Data from ICO Drops).' Meanwhile, new competitors, especially LetsBonk, threaten Pump.fun's market share. LetsBonk surpassed Pump.fun with 16,797 meme coins released by July 2025. Although it still leads, the high-risk PUMP token model has raised questions about its long-term sustainability.
Regarding the platform's token structure, the platform's token has no embedded economic rights. The Pump.fun team has clarified that the only function of the token is to promote the platform.
According to BitMart, this lack of value means that PUMP is essentially a 'story-based asset only.' This discourages holders from long-term commitment, weakening their attachment to the platform.
However, the strong brand of Pump.fun still represents a key advantage. Several leading trading platforms, including Coinbase and Binance, have announced their support for PUMP. However, without improvements in the platform's tokens, Pump.fun risks repeating the failures of previous projects.
