Pump.fun is facing the risk of complete collapse as the on-chain metrics and revenue currently do not promise well. According to information, monthly revenue in July dropped to $24.96 million. This figure is about 80% lower than the peak of $130 million, indicating that this launchpad platform is undergoing a severe revenue decline.

Simply put, fewer and fewer projects are releasing new tokens, leading to a rapid drying up of capital. As a result, the platform cannot sustain itself. However, PUMP is still being traded at 4.7 times its annual revenue - a quite high figure.

PUMP Price Chart | Source: TradingView

So, where does that figure of 4.7 times come from? Pump.fun recorded revenue of $24.96 million in July, equivalent to about $299.5 million annually. With 354 billion tokens in circulation and a market price of $0.0028, the market capitalization is approximately $1.02 billion.

This brings the revenue ratio to about 4-5 times. Therefore, based on fundamentals compared to prices, PUMP is quite highly valued. In other words, the price of PUMP is higher than the revenue that could support it.

Pump.fun is Running Out of Steam

Therefore, PUMP is in a difficult situation, but the high valuation does not help much. Over the past month, the price has dropped more than 33%. Combined with weak development and low revenue, this makes the token weak. Any decline could trigger a rapid sell-off. Worse, the supply concentration of Pump.fun remains at a dangerous level. 10 wallets essentially hold about 75% of the total tokens, making PUMP vulnerable to a mass sell-off.

Source: SolScan

In every aspect, PUMP is facing a risky situation. Weak revenue, stagnant growth, and extremely high supply concentration make this token very vulnerable to any decline.

With the token being traded significantly higher than its core value, even a slight slowdown could lead to a strong sell-off, laying the foundation for real pressure. Therefore, Pump.fun is definitely a project to watch.

Register a Binance account to receive permanent trading fee rebates:

- Link to register a new account: https://accounts.binance.com/register?ref=Q2FSX523

- Referral code: Q2FSX523