Pump platform Token PUMP issuance has sparked market controversy

Recently, Pump.fun announced the launch of the platform Token PUMP, which has attracted widespread attention and discussion in the market. The maximum supply of PUMP Token is 1 trillion coins, of which 33% will be used for the initial Token issuance fundraising. The private and public round tokens are uniformly priced at $0.004 per coin, with a total valuation reaching $4 billion. This means that there will be at least $1.32 billion of potential selling pressure after PUMP goes live.

As a leader in the MEME issuance platform, Pump.fun's decision to issue coins has exacerbated the already tense market sentiment. Currently, the market is facing liquidity tightening and low sentiment, with Pump.fun's daily revenue and user activity significantly declining compared to peak periods, while its market share is gradually being eroded by emerging competitors. Against this backdrop, its high valuation public offering is widely believed to have structural issues: the Token lacks actual value, there is significant early selling pressure, the team's unlocking plan is opaque, and it has clearly overdrawn its valuation during the down cycle of altcoins.

Since its launch in January 2024, Pump.fun has accumulated nearly $670 million in revenue, with a single-day transaction fee peak close to $7 million. However, just as PUMP is about to be issued, competitor letsbonk.fun has risen strongly. letsbonk.fun has surpassed Pump.fun with 15,600 Token issuances compared to Pump.fun's 11,500, momentarily reaching a market share of 49.8%, exceeding Pump.fun's 40.9%. This is the first time since January 2024 that Pump.fun has been surpassed by a competitor in the Solana MEME market share, raising market doubts about its monopoly position.

The PUMP Token distribution plan is as follows:

• 33% for initial Token issuance
• 24% allocated to community and ecosystem programs
• 20% allocated to the team
• 2.4% for ecosystem fund
• 2% for issuance
• 13% to existing investors
• 3% allocated to live streaming
• 2.6% for liquidity and exchange

The PUMP Token sale will raise 33% of the total supply, with 18% allocated for the private sale and 15% for the public sale. The fundraising price for both rounds is $0.004 per Token, with a total valuation of $4 billion, and all Tokens will be fully unlocked on the first day of listing.

From the perspective of market share and trading activity, Pump.fun still maintains a leading position, but its market dominance is being eroded by competitors. In terms of the token economic model, PUMP has obvious flaws. The official statement indicates that the sole purpose of PUMP is for the promotion and dissemination of the platform, and it does not possess any economic rights, which makes its intrinsic value basis close to zero.

In contrast, the competitor letsbonk.fun has a more advantageous design in its Token mechanism. Although its BONK Token also does not grant holders platform equity, it has built a strong value support logic by introducing an economic cycle and deflationary model. The platform uses 35% of the 1% transaction fee for market repurchase and destruction of BONK, while 30% is injected into the liquidity pool of BONK, forming an automatic market-making mechanism to enhance liquidity depth.

Overall, Pump.fun faces the following main risks in this round of coin issuance:

1. Overvaluation: The valuation of $4 billion is significantly higher than that of the competitor BONK ($2 billion), raising market doubts.

2. Token model defect: PUMP lacks basic economic rights, relying solely on brand narrative to support its value, and lacks long-term holding incentives.

3. Poor market environment: The altcoin market is still in a state of tight liquidity, and users remain cautious towards tokens with high valuations and high selling pressure.

4. Selling pressure risk: The public offering quota reaches up to $600 million, far exceeding industry norms, which may lead to insufficient buying in the secondary market. At the same time, 33% is unlocked for primary investors at the opening (approximately $1.32 billion), which may exacerbate price pressure in the short term.

The future performance of PUMP will largely depend on whether the project team can timely construct a more sustainable Token value system and reinforce its market dominance and user confidence through product innovation or ecological integration.