pump.fun speculation has stopped, Solana's sky collapses?

Author: 🔫Scof💀, ChainCatcher

Edited by: TB, ChainCatcher

Pump's bullet is in the center of the eyebrows

Just now, alon, co-founder of pump.fun, posted a statement that the official X account of pump.fun was stolen and the fraudulent token "PUMP" was released, reminding users to pay attention to risks.

As the most active meme coin launch platform in the Solana ecosystem, Pump.fun once became a wealth-making myth for retail investors with its dual-stage mechanism of "inner incubation + external outbreak". The token first accumulates liquidity through the Bonding Curve mechanism within the platform. When the trading volume exceeds the US$69,000 threshold, it will automatically migrate to the top DEX Raydium to establish a fund pool, completing the closed loop from project launch to market speculation. This set of precision design rules will run wildly in 2024:

From April 1 last year to date, the tokens launched from Pump.fun contributed US$346 billion in transaction volume to Raydium, accounting for half of the total DEX traffic. Of the $197 million in the accumulated handling fee collected by the platform, US$104 million from pump.fun transactions.

However, when celebrities such as Trump entered the market with "flash" tokens (such as TRUMP and MELANIA), this game of passing flowers began to expose the naked logic of harvesting. On-chain data shows that more than 70% of meme coins show a "pivot to build a pool" trend in the foreign market stage, with an average survival time of less than 48 hours.

More dangerous signals come from a full tide of liquidity. On February 24, only one of the tokens graduated from Pump.fun had a market value of barely exceeding one million US dollars, and the on-chain speculation boom was almost frozen. Raydium's meme currency trading depth shrank by more than 90% from its peak, while Solana's on-chain stablecoins market value has exceeded US$1 billion in net outflows in the past 30 days, setting the largest capital loss after the FTX crash.

This collapse is no accident. When project parties, trading platforms and celebrities form a "harvest iron triangle", and when Bonding Curve's mathematical model becomes a pumping tool, the confidence of retail investors has long been exhausted in the repeated "smashing the market at the opening". Pump.fun's failure is not only a microcosm of Solana's ecological liquidity crisis, but also a cruel question to the meme narrative by the entire crypto world - when the bubble recedes and the carnival ends, who will clean up this ruin of capital?

SOL's highest point fell by more than 50%, and the ecosystem fell into a

downturn

As one of the most eye-catching public chain tokens in 2024, Solana has been advancing with the east wind of Pump and meme, rising nearly 200% throughout the year.

But since Trump released his tokens in Solana on January 18, the wave seems to have finally been photographed on the shore: SOL's coin price first hit a record high of $295 on January 19, then turned sharply, with a drop of more than 50%.

There are only 3 days left before the largest token unlock in Solana's history (worth $2 billion), and 11.2 million SOLs will be unlocked in circulation, most of which come from FTX auctions, and the cost is $64, which may also form a huge selling pressure.

In addition to the poor performance of token prices, according to Defilama, Solana's TVL has dropped from a highest of US$12.19 billion to US$7.22 billion today, and daily transaction fee revenue has also been decreasing.

In addition, Solana Eco's 24-hour net inflow data showed that US$260 million flowed out on January 18 and 19 alone, and the inflow of funds has continued to decrease since then, far less than in the previous Pump period.

Not only that, but a series of other indicators are not optimistic, and Solana's mainstream protocol tokens have also shown a downward trend in the past seven days:

 Solana\'s ecological market performance on Rootdata

Overall, the ecology shows a scene of "trees falling and money scattering".

This can't help but ask: Is Solana's story over?

Solana labs Lianchuang toly, too, is afraid of collapse!

Faced with the risk of token price collapse, the Solana ecosystem is experiencing the biggest fear, uncertainty and FUD since the FTX storm. Analysts have estimated that scammers have made more than $10 billion in the entire meme coin speculation cycle.

Faced with unavoidable real problems, many community members also responded.

As the co-founder of Solana labs, toly has always advocated healthy technological development and innovation. He has also repeatedly called on builders to return to innovation and build high-quality projects. Although he did not face the criticism directly, he repeatedly revealed his dissatisfaction with Pump in conversations with other community members in X. Faced with long-term supporters, he even responded that "The assholes that mess with markets to max extract can go f' themselves." And the group referred to is self-evident.

Encryption KOL@cobie has also pointed out the problem of PVP mode many times. He said, "The current market development is that market participants are actively rushing into these scams like moths. Most people know that these are scams, but the goal is to sell them to buyers at 3 times the price. They only want to get rich in 2 weeks, not 2-4 years. Players hope they can win the jackpot in the next action, too."

Of course, the community is also making attempts to save itself. Solana launched its SIMD-0228 proposal on February 26, setting a target staking rate of 50%. If the pledge rate exceeds 50%, the issuance volume will decrease and the yield will decrease; if it is less than 50%, the issuance volume will increase and the yield will increase. The minimum inflation rate is 0%, and the maximum inflation rate is determined based on the current issuance curve. The proposal aims to shift SOL issuance to a market-driven model.

In addition, Solana spot ETF has become another life-saving straw - data from the prediction platform Polymarket shows that the market believes that the probability of approval before 2025 is as high as 85.4%, and the probability of passing six months ago has also risen to 34%. If it comes true, referring to the siphon effect of the accumulated funds of Bitcoin ETFs of 100 billion US dollars and the Ethereum ETFs of 10 billion US dollars, Solana may usher in a billion-dollar injection of live water.

Solana's dilemma is by no means an isolated case, but a microcosm of the entire industry's "speculation backfires against innovation".

As KOL@0xNing0x summarizes: "Now it has entered this cycle settlement moment. The young players are MVPs, Solana, Pump.fun, and Jupiter are the best supporters, TRUMP is the lying win dog, AI16Z is the lying win dog, JLP holder is the lying win dog. The losers are Base and Virtual, Ethereum, Arbitrum, Optimism, ZkSync, and Starknet are the lying top laners, mid laners, junglers and supporters."

Solana may have only two ways out: either rely on external capital such as ETFs to prolong its life, but it may deepen its path dependence on financial casinos; or like Toly advocates "scraping the bone to cure the poison", it will endure short-term pain and rebuild its developer's beliefs.