A recent data analysis revealed an overwhelming 98.6% of memecoins created on the Solana-based platform pump.fun failed to launch. Pump.fun is a tool designed to streamline the creation of memecoins, but data shows it has seen a low success rate.
According to Dune Analytics, the proportion of these tokens that manage to be listed on the decentralized finance protocol Raydium stands at a mere 1.41% after fluctuating between 1.41% and 1.21% since May.
Meanwhile, the all-time high success rate of 2.56% was briefly touched on February 16.
Success Rate of Memecoins
Adam Cochran, a partner at Cinneamhain Ventures, highlighted the low success rate in an X post. He noted the coins’ graduation rate on the pump.fun remains still around 1.4%. These coins achieved a market cap of $69,000 and surfaced on a decentralized exchange.
2/23
We’re starting to flush out memes.
The “graduation rate” of coins on Pump Fun (those that made it to $69k and got listed on a dex) is stagnant around 1.4%https://t.co/fCruRRnvZW
(h/t @0xBreadguy)
— Adam Cochran (adamscochran.eth) (@adamscochran) August 1, 2024
Cochran also stated that none of the new coins have reached a $20 million Fully Dilated Valuation (FDV). The FDV measures the total value of a crypto asset if all its coins are in circulation.
He interpreted this stagnation as a possible sign that the memecoin craze might be nearing its end. Contrary to Cochran’s view, some analysts argue that the low launch rate does not necessarily indicate the decline of the memecoin market.
Instead, they suggest a pump.fun’s ease of use has simply lowered the barrier to entry, resulting in a flood of tokens with little potential for success.
Bunjil, a pseudonymous crypto commentator, expressed this sentiment to his over 56,900 followers on X. He asserted that pump.fun has not damaged the memecoin market but demystified the creation process, making it accessible to a broader audience.
Pump.fun Thrives Despite Low Success Rate
Despite the high failure rate of token launches, pump.fun has still generated significant revenue.
The platform charges a 1% fee for every transaction until a token reaches a predetermined market cap. At times, the platform’s revenue has surpassed that of Ethereum.
A notable scenario occurred on July 29, when the platform realized revenue of approximately $864,000 in one day. Within the same period, Ethereum only recorded revenue of $550,000.
One reason is that the platform has gained significant traction partly due to its adoption by celebrities. Prominent individuals like Iggy Azalea, Caitlyn Jenner, and Jason Derulo have utilized pump.fun to launch and promote their memecoins since May.
This has solidified pump.fun’s influence in the memecoin market, even though most of its tokens haven’t achieved much success.
Regarding the memecoins sector performance, CoinMarketCap reported a total market capitalization of $44.94 billion, reflecting a 2.67% drop in the past 24 hours. Despite this decline, the trading volume has increased by 27.29%, reaching $4.48 billion in the same timeframe.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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