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What is pump.fun? Here, we explain the platform and how it works, and what controversies surround it.
Pump.fun is a platform where users can create and trade cryptocurrency tokens, specifically , on the Solana blockchain.
Users can launch their own tokens easily with minimal technical knowledge. The process involves filling out a form with a token name, ticker, description, and an image.
Tokens created on Pump.fun are tradable immediately after creation through a mechanism called a "bonding curve."
The bonding curve adjusts the token's price based on supply and demand. When enough buyers push the market cap to a certain level, some liquidity is transferred to another decentralised exchange like Raydium, potentially increasing the token’s visibility and value.
To use pump.fun, a user primarily needs to have Solana (SOL) in their wallet. You can .
Any transactions or trading within the pump.fun platform would require SOL for gas fees, similar to how Ethereum uses ETH for transactions. You can buy SOL on CoinJar.
There are some interesting social activities on Pump.fun. This includes live streams where creators can promote their tokens. These streams have been due to the content shared, leading to temporary suspensions of this feature.
The platform also has chats for user interaction without needing external platforms like Telegram. This has led to both innovative community building but of course, as with most new tech, people indulge in bad behaviour and as such, chats have also been temporarily suspended before too.
##Pump.fun controversy
Pump.fun has faced scrutiny from financial regulators, especially with the UK's Financial Conduct Authority, which placed it on a in the UK. The platform has also been criticised for associations with scams like rug pulls, where creators inflate a token's price before selling off their holdings, leaving other investors with worthless assets.
Despite these issues, Pump.fun has been credited with significantly increasing activity on the Solana network.
that all created tokens trade through a token launching system. Pump.fun say that there's no early sale where the team or insiders can buy tokens at a discount before the public. The creators don't give themselves free tokens, so that theoretically everyone has a fair shot at buying the token from the start.
Browse through the tokens available on Pump.fun. Look for ones that might appeal to you either by their name, the image, or the community buzz around them. Remember, these are meme coins, so often the appeal is in the humor or cultural relevance.
Step 2: Buy the coin on the bonding curve
This is a pricing mechanism where the price of the token increases as more are bought.
When you buy, you're adding liquidity to a pool, which increases the price for the next buyer. To buy, you'll need a Solana-compatible wallet like Phantom or Solflare, and some SOL (Solana's native cryptocurrency) to purchase tokens.
Step 3: Sell at any time
You can decide to sell your tokens at any point. Just like buying, selling on the bonding curve decreases the price for the next seller because you're removing liquidity from the pool. If the price goes up after you buy, you can sell for a profit. If it goes down, you might sell at a loss.
Step 4: Reaching a market cap of $100K
As more people buy the token, its total market cap (the total value of all tokens in circulation) grows. Once the market cap reaches $100,000, Pump.fun deposits $17,000 worth of liquidity into Raydium.
Some of these tokens are permanently removed from circulation (called “burning”), which can theoretically increase the value of the remaining tokens by reducing supply.
Here's a breakdown of the you'll encounter when using the pump.fun platform.
There's no cost to make a new coin on pump.fun. It's free (0 SOL).
Each time you buy or sell a coin, there's a 1% fee on the total amount you're spending or receiving, and this fee is in SOL.
If your coin becomes popular enough to move to Raydium, there's a fixed fee of 6 SOL. This fee covers both the network costs and Raydium's fees, which can change but are always included in this 6 SOL. This fee comes out of the coin's liquidity, so you don't have to pay it out of your pocket. At the time of writing (10 February 2025), this is AUD$1913.
As with any crypto platform, especially one dealing with speculative assets like memecoins, there's always a risk. Even with fair launches, there can be scams where creators manipulate the market and then abandon the project. This platform is really, REALLY just for fun, and you can’t expect to make a lot of profits from it.
CoinJar is not in any way affiliated with Pump.fun.
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