Syncracy Capital Deconstructs PumpFun: Imagination of Platform Equity and Reality of Capital

Source: Pump.fuhttps://www.youtube.com/watch?v=69t3aOMoJiY n's $1 Billion ICO Has Caused Controversy. Can It Succeed?

Organize & compile: lenaxin, ChainCatcher

Editor 's note:

The content of this article is compiled from a video interview between Unchained and Ryan Watkins , co-founder of Syncracy Capital , and analyzes PumpFun 's profit model, valuation logic, systemic risks and potential transformation paths.

On June 3 , according to @NextFuckingThing , " PumpFun plans to raise $ 1 billion in full dilution valuation through ICO for $ 4 billion, and may airdrop 10% of tokens to the community . " The news triggered strong response from the community , and trader Ansem compared it to " the second plane crashed into the Twin Towers " . The vote it initiated showed that 70% of participants believed that PumpFun had a negative impact on the crypto industry.

ChianCatcher organizes and compiles the content.

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l Without explaining where the funds go, PumpFun raises another $1 billion while making a profit, which is a serious consumption of user trust.

l Nearly half of the transaction volume is controlled by robots and third parties, and PumpFun is gradually losing dominance over its own ecosystem.

l What really retains users is never airdrops, but the product itself .

l The value of tokens is not based on financing gimmicks, but on clear purpose and execution .

(one) Why did PumpFun **earn $700 million, but he was on the

verge of collapse of trust**

Laura Shin : I would like to ask you about the incident and how you evaluate this reaction in the market?

Ryan Watkins : Meme has been the most controversial asset class in the crypto space for the past two years , and Pump Fun has become a typical example of this controversy. Since its launch in the first quarter of 2024 , the platform has achieved a total revenue of US$ 700 million with a 1% transaction fee and binding curve mechanism, becoming one of the most profitable projects in the crypto economy.

However, behind this business success, many problems are accompanied by: the phenomenon of losses of ordinary investors is becoming increasingly serious, mainly due to systemic risks such as market manipulation of robots and insider trading; the originally simple community culture has been alienated into a complex "meme currency industry chain " ; what is more worthy of attention is that the platform initiated a US$1 billion financing to the loss-making user group without clarifying the purpose of the funds .

From the perspective of commercial value, although its profit model is controversial, its financial performance is conclusive; in the current market environment, if the trend of meme coins continues, its valuation is still reasonable; in essence, the project provides investment opportunities for " platform equity " , which just explains the nature of the coexistence of disputes and value.

Laura Shin : Is Pump Fun still trustworthy?

Ryan Watkins : If Pump Fun succeeds in this $ 1 billion ICO , it will become the third largest financing in cryptocurrency history, second only to EOS 's $ 4.2 billion and Telegram 's $ 1.7 billion. The scale of a single financing of a meme currency platform is comparable to an industry giant like Circle , and this phenomenon itself is worthy of in-depth discussion.

Although its newly launched AMM protocol annualized revenue reached US$ 52 million, it is still insignificant compared to the platform's cumulative total revenue of US$ 700 million. More importantly, in the absence of major product breakthroughs, the platform neither stated the specific purpose of the funds nor responded to industry insiders such as Vanna Charmer on the efficiency of capital allocation.

From the perspective of development strategy, signing a large amount of money to contract top content creators may be the most direct breakthrough , referring to the contract value of top creators such as Aiden Ross for hundreds of millions of dollars. In the longer term, mature business models in crypto fields such as developing public chains, establishing exchanges or issuing stablecoins are all possible directions. But the core problem is that when the platform is still dominated by robots, any ecological layout will be difficult to solve the fundamental trust crisis. For PumpFun , rebuilding community consensus is far more important than pursuing financing scale.

(two) **PumpFun’s gamble: Ambitions and hidden worries behind 1 billion

financing**

Laura Shin : If the ICO is successful, which strategy do you think will be the best choice?

Ryan Watkins : If I lead the use of this fund, the first priority will be to form a top social media product team. I will focus on recruiting talents with artificial intelligence background from platforms such as TikTok and Meta to reconstruct the current chaotic content discovery mechanism. The current PumpFun information flow experience does have obvious flaws , and users often fall into meaningless browsing loops.

Secondly, we will invest a lot of money to introduce top content creators, including crypto-native KOLs and top anchors in traditional fields. Although the contract is expensive, this is a necessary measure to quickly establish a content ecosystem. At the level of trading products, you can consider cooperating with innovative agreements such as Hyperliquid , and learn from its HIP-3 profit mechanism to develop a sustainable contract market for meme coins; of course, relying on existing financial strength, it is also completely feasible to build an exchange independently.

But the most important thing is to clarify the purpose of the funds. If a large-scale token repurchase program can be launched and the ability to directly improve the token value capture capability is perhaps the most recognized solution for the community. After all, in the absence of a clear roadmap, any grand idea is difficult to gain user trust.

Laura Shin : Does PumpFun really need such a huge amount of financing to transform?​

Ryan Watkins : PumpFun can completely break through the limitations of meme coins and transform into a broader asset issuance platform. As the leading issuance platform currently occupying 95% of the market share, its advantages are obvious: adequate financial reserves, one of the most popular front-ends in the Solana ecosystem, and a growing mobile user base.

The direction of transformation can focus on building a general capital market infrastructure:

l Expand asset categories and introduce new assets such as tokens in the Internet capital market

l Establish a strict asset screening mechanism, which is different from the current disordered state

l Develop supporting functions, such as founder lock-up period, compliant fundraising tools, etc.

This transformation touches the fundamental contradiction in the field of encryption: how to set reasonable boundaries in permissionless systems? The current situation of PumpFun has sparked a profound discussion on " what should be built on blockchain " - is it continuing to support pure speculative tools, or is it moving to platforms that create real value? There is no standard answer to this question, but it is indeed a problem that the entire ecosystem must face.

Laura Shin : Against the backdrop of the current decline in revenue, what are the strategic considerations for PumpFun to choose to initiate an ICO at this time?​

Ryan Watkins : Analyzing PumpFun ’s ICO valuation from an investment perspective , the pricing logic of its 4 billion US dollar valuation corresponding to an 8- fold price-to-sales ratio is worth discussing. Although the platform's recent 30- day revenue performance of US$ 45 million (annualized US$ 500 million) seems to support this valuation, the particularity of the meme currency market makes this linear deduction fundamentally flawed.

The Trump meme coin case proves that the transaction volume of such assets is highly dependent on the occasional celebrity effect, and the market obviously finds it difficult to continue to create more influential events. Even if the current trading volume remains at a relatively high level, the sustainability of this growth model is questionable.

The deeper problem is that the platform has not yet shown the ability to break through the cyclical characteristics of meme coins, and the growth expectation implicitly of the 8- fold price-to-sales ratio may have overdrawn future potential. If PumpFun cannot build a new growth engine that surpasses the issuance of celebrities, its current valuation may face severe tests.

Laura Shin : Are the early liquidity clauses under PumpFun’s current valuation of $ 4 billion hidden risks?

Ryan Watkins : From the nature of ICO , this completely liquid design is not surprising - the tokens can be traded freely once they are listed. As long as all investors participate at a unified valuation, such lock-in term terms do not constitute a problem in themselves.

(three) **Can PumpFun "realize Solana's name" instead of creating another

airdrop game?**

Laura Shin : How does Solana find a strategic balance between maintaining the traffic dividends brought by meme and getting rid of the stigma of " speculative public chains " ?

Ryan Watkins : The market has reasonable doubts about PumpFun ’s $1 billion ICO . After all, the platform has made a profit of $ 700 million but is still raising large amounts of funds. In the short term, it may trigger capital diversion, resulting in pressure on Solana and related assets to sell.

But in the long run, if successful financing is raised, it will enhance Solana 's position as a mainstream financing platform, drive more high-quality projects to settle in, and change the current ecological pattern dominated by meme coins. This benchmark case can also lower the market's psychological threshold for ICO scale and stimulate more compliant fundraising activities.

The key lies in whether PumpFun can use funds for substantial innovation rather than continuing the financial game, which will determine whether this ICO will ultimately be an opportunity for ecological upgrades or another capital harvest .

Laura Shin : What are the considerations behind PumpFun’s financing strategy that mainly chooses ICO and supplements as airdrops?​

Ryan Watkins : Most airdrop projects do not bring substantial value to the product, but instead pay free funds to users who don’t really care about the product – these people often sell off immediately after obtaining the airdrop. The reason why Hyperliquid has become one of the few successful cases is not because users have long-term airdrop tokens (in fact, most people still choose to sell them), but because they have strong product strength and sustainable income model . Airdrops are here only as an auxiliary means to show community consistency, and are in line with the concept of decentralization. The key revelation is:

l Airdrops should be implemented after the product is mature and users must be given sufficient reasons for holding tokens.

l For Solana ecosystem, airdrops may compensate for the losses of some meme currency traders and reactivate the market popularity.

l But in essence, airdrops are just icing on the cake, and the value of the product itself is the decisive factor

Blindly imitating the airdrop model will only cause waste of resources, and the project party should focus more on building a product foundation with real needs.

(Four) **From trading venues to super apps? PumpFun’s breakthrough path

and watershed moment**

Laura Shin : How does PumpFun stay ahead of the increasingly fierce competition?

Ryan Watkins : PumpFun is facing a core challenge: nearly half of the transaction volume has been controlled by third-party interfaces and robots, causing the platform to gradually lose its entry position for asset distribution. This trend will continue to weaken its dominance over the ecosystem, and large third parties can easily build their own coin issuing platforms (as shown in the Radium case) to divert users and liquidity. Although we currently maintain our position by relying on our liquidity advantages, we must strengthen user stickiness in the long run to consolidate competitiveness. Its response strategy focuses on two directions:

1. Social transformation : create emotional stickiness by building social graphs, allowing users to retain their social relationships rather than simply trading needs (in line with the rule of " tools attract users, network effects retain users " proposed by Chris Dixon )

2. Functional generalization : transform competitors' innovation into their own functional modules, and upgrade from a single meme platform to a comprehensive entrance

Fundamentally, PumpFun needs to complete the transformation from " trading venue " to " social + financial super application " before the liquidity advantage fades , otherwise it is only a matter of time before the third-party food sharing ecosystem is completed. Failed cases such as Radium show that pure technology replication is difficult to shake market leaders, but ecological reconstruction combined with social relationships may change the rules of the game.

Laura Shin : Are there any other comments or suggestions about PumpFun ?

Ryan Watkins : There are always extremely controversial but exciting turning points in this industry from time to time. Can PumpFun successfully raise $1 billion? How will the market digest this news? What is the specific purpose of funds? Regardless of the final result, as one of the products with the strongest funding and the widest user base in the crypto field, PumpFun 's every move may have a profound impact on Solana and the entire industry ecosystem. This is destined to be a landmark event worthy of close attention.

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