Pump.fun generates activity with weekly fees and remains robust; however, its token’s price continues to decline.
Summary
- PUMP token is slipping despite robust trading activity
- Recently launched DEX accounts for 50% of fees
- Early token unlocks are flooding PUMP supply
Pump.fun (PUMP) continues to slip, despite relatively robust DeFi activity. Between July 14 and July 20, the Solana-based (SOL) memecoin launchpad generated $10.2 million in platform fees. Yet despite this performance, the token has almost halved in value.
The $10.2 million in weekly fees include both those from its memecoin launchpad and its recently launched DEX. Currently, both generate about the same amount of fees. Notably, @defiIgnas points out that this puts Pump.fun in 17th place by generated fees in the whole crypto industry.
This is significant, as 25% of the Pump.fun DEX fees go toward token burns. This means that the token’s scarcity is directly tied to the fees generated on its platform. Still, while the fees generated were trending down since the token’s launch, PUMP’s price fell much more sharply.
Early token unlocks hurt PUMP’s price
Since its launch on July 12, the Pump token has dropped 47.91% from $0.00716 to its current price of $0.003691. The most likely reason for this price drop was insider selling, both by the team and private investors.
Notably, the PUMP token public sale, open to all investors, accounted for just 15% of the tokens. At the same time, 18% were reserved for private investors. Moreover, all of these tokens were unlocked immediately after the ICO.
This means that whales controlled more than half of the tradable tokens on launch, and many of them dumped their tokens immediately. According to earlier reports, two private investors have already sold 25.5 billion PUMP tokens, generating a $39.6 million profit.
