Memecoin creators using the Pump.fun launchpad can now earn 0.5 SOL (around $80) if their tokens successfully make it to Raydium, a decentralized exchange (DEX) built on the Solana blockchain. This incentive kicks in after tokens complete their bonding curves and qualify for broader trading.
No Upfront Fees for Creating Tokens
As of Thursday, Pump.fun removed the initial $2 fee for creating new tokens, making it free to start. Instead, this cost is now passed on to the first buyer of the token, allowing creators to launch coins without purchasing any of the supply themselves.
How Pump.fun’s Bonding Curve Works
Pump.fun utilizes a bonding curve mechanism for launching and trading tokens. This system ensures fair access to new coins, eliminating the typical pre-sale advantages seen in many crypto projects. Instead of relying on traditional order books, token prices are determined by a predefined mathematical formula. As more tokens are bought, their prices increase exponentially, making the tokens more valuable as demand grows.
Qualifying for Raydium
Once a token launched on Pump.fun reaches a market cap of $69,000, it becomes eligible for listing on Raydium. At this point, a liquidity pool is created, allowing for trading beyond the Pump.fun platform. Importantly, after listing on Raydium, the liquidity provider (LP) tokens are automatically burned, which locks in liquidity. This feature ensures that even if token prices drop, they won’t become entirely illiquid.
Challenges in Reaching Raydium
While the opportunity to earn 0.5 SOL is appealing, it’s worth noting that only 1% of tokens on Pump.fun reach Raydium. The majority fail to hit the $69,000 market cap milestone.
A Lucrative Platform
Despite the challenges, Pump.fun has proven to be a significant revenue generator. In May, it became the second-largest revenue-generating platform in the crypto space, bringing in $3.38 million over a single week, second only to the Ethereum network. The platform continued its success in July, frequently exceeding $1 million in daily revenue, with a peak of $2.31 million on July 30.
Since its launch in January 2024, Pump.fun has amassed a cumulative revenue of $87.2 million, with $85.9 million coming from tokens that didn’t reach the broader market.
Conclusion
Pump.fun provides an accessible way for non-technical users to launch memecoins without significant upfront costs. With its integration into the Solana blockchain and subsequent addition of Blast, the platform has quickly become a go-to for memecoin creators looking to enter the crypto market with minimal barriers.