PUMP token erases gains less than a week after initial coin offering amid rising share of LetsBONK memecoin generator

Less than a week after Pump.fun's highly anticipated ICO, its newly launched PUMP token has seen a reversal in price. The token, now trading around $0.004, has slipped over 22% today, bringing it in line with its debut price, according to The Block's price page.

PUMP reached above $0.006 on Tuesday, a day after the initial coin offering. Pump raised $600 million through its token sale in just 12 minutes, in an offering of 15% of its total token supply to the public. An additional 18% of the total 1 trillion PUMP supply was offered in a private sale at a fully diluted valuation of $4 billion.

However, the memecoin generator, which for all intents and purposes put Solana back on the map when it launched in early 2024, has seen its market share erode this month.

According to The Block’s data, LetsBONK, a rival platform geared toward the BONK memecoin ecosystem, surpassed Pump.fun in memecoin generation beginning two weeks ago. This is on top of the declining number of daily average token mints in aggregate on Solana.

While LetsBONK’s ascendancy is far from assured long term, it can be said to have achieved what others had failed. Despite half a dozen contenders, no single other memecoin generator had ever captured a fraction of Pump’s launch volume. The BONK token, associated with LetsBONK, has seen a 64% price increase since the platform launched in April.

Pumping up the incentives

Pump.fun's volumes had grown ahead of its ICO. The team noted that they were looking to introduce additional “utility mechanisms” for PUMP, including fee rebates, token buybacks, and other incentives. The Block was first to report that PUMP would introduce a revenue-sharing protocol for token holders.

On Tuesday, Pump transferred 187,770 SOL worth about $31.3 million to a buyback wallet, which was used to repurchase PUMP at an average price of $0.0064 each. News of the buyback sent PUMP as high as 17% on Tuesday, to around $0.0067. Pump has committed to using 25% of protocol revenues for buybacks. On Friday, the platform brought in about $968,000 in fees, which is below average for the protocol.

On Friday, Pump co-founder Alon Cohen said the platform was introducing a “community takeover” mechanism that will enable users to commandeer “abandoned” projects. 

“now, it’s possible for any community to maximize their odds of success by redirecting Creator Fees to the wallet of the most dedicated contributors - those that raid hard every day, create content, develop stuff, and more,” Cohen wrote on X.

Last week, Pump also announced its first acquisition, Kolscan, a Solana-based wallet tracker that monitors top onchain traders.

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