Pump.fun recently announced its native token’s initial coin offering (ICO) and listing set for July 12th on multiple exchanges including Bybit and Bitget.
According to the X post, 33% of the 1 Trillion supply of $PUMP token is allocated for the sale on July 12th at a price of $0.004 per token.
This means that Pump.fun aims to raise $1.32 billion and list at a $4 billion fully diluted valuation (FDV).
Insane? Obviously, but this is crypto, dreams do come true and grown men answer to the name “retardio.”
Absolute Cinema, no?
The question on most degen minds right now is if this is an attempt to milk the crypto ecosystem for the last time as Pump.fun revenue has reportedly been on decline, especially with growing competitions or if this is a strategic raise to be put to good use to grow the platform and the Solana network?
I think we ought to start by asking why a token sale is necessary in the first place, especially considering that Pump.fun has so far generated over $715 million as revenue, all under 2 years, that's about the fastest growing entity in the world by revenue.
Now this is something the ICO announcement post on X doesn't quite say:
our plan is to Kill Facebook, TikTok, and Twitch. On Solana.
we're building pump fun to replace existing social platforms with one that gives instead of takes
whether you’re a trader, creator, startup founder, or anyone else, pump fun will allow you to tap into a global network of instant money & attention
to unlock further growth, we decided to launch $PUMP - the official native token of the pump.fun protocols
$PUMP will grow the pump.fun ecosystem by delivering value to its community and incentivizing the ecosystem that continues helping the platform succeed
while the token will be fully functional at launch, we’re giving thorough consideration to utility mechanisms like fee rebates, token buybacks, or other incentives and promotions — X announcement post
Frankly speaking, this just sounds like the Pump.fun team saying: hey, we're selling you these tokens for $1.32 billion, we may use the funds to do some shit you may like or not, it's a consideration but we're not sure yet, but hey, here's the token, buy it.
You've bought worse tokens on the very platform selling you its own native token, what could go wrong that you aren't already familiar with, right?
Saying that they plan to kill Facebook, TikTok and Twitch isn't saying much because they are not the first to want to kill those platforms and it's rather comical that they think a “meme launch infra” that has rekt many individuals financially is how they can kill social platforms whose business models are completely different and effectively have a different appeal to the current user base.
It's quite a retarded thing to say, but hey, the audience are “retardios” so pretty on brand there.
That said, judging by most posts on X talking about this launch that I've come across, it's evident that most lean on the conclusion that this is in fact, an extraction event. The token distribution itself so clearly shows significant team allocation split across different names like foundation, ecosystem fund, team, etc.
33% will be sold in the Initial Coin Offering
24% reserved for community and ecosystem initiatives
20% to the team
2.4% to the ecosystem fund
2% for the foundation
13% to existing investors
3% for livestreaming
2.6% for liquidity + exchanges
20 + 2.4 + 13 + 2.4 + 3 + 24 + 2 = 66.8%
This is the supply that will still be controlled by the Pump.fun team after the sale, assuming that all 33% allocated for ICO gets bought.
Sure, 24% of that is community incentives which includes the planned airdrop but until the airdrop is done, the supply remains in control of the team, so not only is Pump.fun selling you a memecoin for $1.32 billion, it is also going to be controlling supply of same token worth over $2.67 billion at the ICO rate per token.
It is, an extremely greedy extraction event. Now we wait to see if it will be a success at that.