The community expects a win-win celebration, rather than just the project party filling their pockets!
Article author: 0x9999in1, MetaEra
Cumulative revenue exceeds $520 million.
The total number of tokens to be deployed is approximately 7.41 million.
The number of users is 7.41 million.
This is the accumulated data of Pump.fun in just one year. It can be said that Pump.fun's leading position and revenue results in the Mmme track are similar to the unmatched success of OpenSea in 2021. Both seized opportunities in the Meme and NFT sectors, rapidly rising to become nearly unreplicable success models.
Pump.fun's token issuance model: Dutch auction sparks public outrage
On February 9, Wu revealed: Pump.fun is preparing to issue tokens and conduct a public offering, adopting a Dutch auction model, and is collaborating with centralized exchanges to develop the system.
Earlier, Binance co-founder He Yi also mentioned using the Dutch auction innovative token IEO model during an AMA. Dutch auctions, also known as 'descending price auctions,' start at a high price and decrease at a fixed rate, with participants bidding at what they consider an appropriate price.
Further details on this Dutch auction come from KOL He Bi: Due to the project's enormity and various requirements, the current public offering systems of major exchanges do not meet Pump.fun's needs. Almost all domestic first, second, and third-tier exchanges are developing a Dutch auction system for Pump.fun. Currently, it is known that there are no airdrops, and 50% of the tokens will be sold via Dutch auction.
As of now, no relevant exchanges have disclosed more collaboration details or customization messages. However, the news has caused a huge uproar among retail investors. Certainly, issuing tokens while making so much profit at Pump.fun and providing airdrops to retail investors is a win-win situation. However, the problem lies in the Dutch auction model. Retail investors cannot only obtain airdrop profits but must also participate in the more fiercely competitive Dutch auction model. The investment cost for retail investors is likely not low, but the risk of obtaining profits is also increasing. At this stage, Pump.fun's Dutch auction model seems more like a bloody and greedy sale.
The Dutch auction model once became popular during the NFT explosion phase, with many top hot projects advocating for NFTs to be minted through the Dutch auction model. The core feature is to maximize the revenue from selling NFTs, ensuring that even if the minting phase does not go smoothly, the gradually declining price prevents the NFT from failing to launch. However, for investors, it resembles a gamble, requiring higher costs while also participating in fierce Gas Wars to successfully purchase NFTs, leading to serious internal competition among investors. Ultimately, the risks are borne by participants, while the profits are taken by sellers.
Pump.fun co-founder Alon responds: Token issuance is false news.
As news of Pump.fun's token issuance continues to ferment, Pump.fun co-founder Alon stated on social media: 'Seeing rumors about a potential Pump.fun token launch, these are false messages. It is advised not to believe any information released by non-official Pump.fun accounts. Over the past year, the Pump.fun team has mainly focused on improving the product but has always been committed to providing users with the returns they deserve. Good things take time.'
However, some netizens believe that recent lawsuits against Pump.fun in multiple locations in the United States may impact whether it ultimately issues tokens. Perhaps Pump.fun will wait for some time before choosing an appropriate moment to issue tokens, or due to dissatisfaction with the 'Dutch auction model,' it may be compelled to modify its token economic model and reserve a portion for airdrops.
Will OpenSea issue tokens: IPO or token issuance? Struggling and hesitating.
During its peak, although OpenSea did not profit from GAS, the high fee of 2.5% allowed OS to earn a significant amount of money. In 2022, many believed that OpenSea, after raising $13 billion, was unlikely to issue tokens and would likely opt for an IPO to realize financing.
In the context of a sharp decline in subsequent revenue, OpenSea faces the dilemma of dying without issuing tokens. Providing returns to users and the community is a tradition of Web3. Back then, Uni was forced by Sushi to issue tokens to regain lost users, and OpenSea similarly faces the risk of losing a large number of users to Blur if it does not issue tokens. Ultimately, it lost its position as the number one NFT trading market in the competitive landscape.
Finally, on November 4, 2024, we saw some signs regarding whether OpenSea would issue tokens. OpenSea's official Twitter announced that a 'brand new OpenSea' would launch in December and opened a site for registering testing addresses, with over 700,000 addresses already on the waitlist.
But just yesterday (February 11), according to an official announcement from the OpenSea Foundation: Today's rumors on platform X are all untrue, and users are reminded to only trust links published by official accounts to avoid being scammed. Previously, there were rumors about OpenSea's TGE, but the official has clearly denied it.
Summary
The rise of Pump.fun and OpenSea is increasingly dependent on market conditions, product strength, first-mover advantages, and other factors. However, their subsequent development is more reliant on the contribution of investor fees. When retail investors hope to receive rewards from the platform, if the platform's strategy does not meet their expectations, or even goes against them, it may further confirm the saying that 'he who wins the people's hearts wins the world.' Because the community expects a win-win celebration, rather than just the project party filling their pockets!