Pump.fun has eliminated the fee for creating meme tokens and promised a reward of 0.5 SOL (~$80) for completing the ‘bonding curve’.
Today we’re introducing 2 HUGE changes to the pump fun mechanism (in beta)
1) Coin creation is FREE
2) Coin creators receive 0.5 SOL (~$80) when their coin completes its bonding curve
How does it work?
1) Instead of the creator having to pay ~$2 for coin creation, this cost… pic.twitter.com/Zp7DCJQoya
— pump.fun (@pumpdotfun) August 9, 2024
“Instead of paying ~$2 for coin creation, this cost is now covered by the first buyer. This opens up the possibility of issuing a token without purchasing its supply,” explained the team.
The ‘bonding curve’ is a method to ensure guaranteed liquidity for new tokens once they hit the Raydium trading platform on the Solana blockchain. This model retains a small amount from each asset purchase and distributes it along the liquidity curve.
For Pump.fun, once a meme coin reaches a market capitalization of $69,000, the ‘bonding curve’ is completed. This approach ensures the asset does not become entirely illiquid.
According to platform representatives, the 0.5 SOL reward is allocated from the ‘Pump.fun migration fee’, which amounts to 1.5 SOL.
“The reward also incentivizes all developers to bring their coin to 100%. […] When a coin is created, it is not placed on the blockchain until someone buys it. This is why there can sometimes be a difference between the launch time on the Pump.fun interface and the main network,” the publication states.
The ‘meme factory’ update followed the publication of disappointing launch results on the platform. Only 1.4% of coins created with Pump.fun make it to Raydium.
While the reward may serve as an incentive for creators, it might not be sufficient to prevent fraud on the platform. Many market participants misunderstood the update’s concept.
Well it was fun while it last lasted.
I don’t see how this system doesn’t get exploited by people buying up their own tokens a 100 times over to make 50 sol
— ANΦN (@anon_rip) August 9, 2024
“I don’t see how this system doesn’t get exploited by people buying up their own tokens a 100 times over to make 50 SOL,” wrote anon_rip.
A user named Ape stated that the coin issuance fee “kept the Pump.fun site afloat.” Now, instead of 10,000 new tokens a day, there will be 50,000, suggested KashKysh.
On July 1, Pump.fun’s daily revenue volume reached $1.99 million, surpassing Ethereum in this metric.
Previously, the cryptocurrency data service DEX Screener also launched a competing meme-coin creation platform on Solana called Moonshot.