Pump.fun is a memecoin launchpad platform built on the Solana blockchain. It's designed to make it easy for anyone to launch a token (especially memecoins) without coding skills. Launching tokens with pump.fun removes the need to understand the heavy economics behind bonding curves and the automated market-making model. The idea behind pump.fun is to create a gamified environment for launching and discovering new tokens on Solana.
How does pump.fun work?
The following highlights how pump.fun works:
1. Anyone Can Launch a Token
Anyone can create a token in under a minute with just a small amount of SOL (usually around 0.002 SOL). Pump.fun needs the creator to input the token name and ticker. Creators can personalize the tokens in their names, tickers and logos.
2. Fair Launch Mechanism
Pump.fun uses a bonding curve model in its economics. The price of the token increases as more people buy. This means the earlier you buy in, the cheaper the token. The more people buy, the higher the price, and vice versa. The bonding curve itself acts as an automated market maker. You can always buy and sell the token based on its position on the curve. Think of this curve as the market.
- To Buy: You move the curve rightward → cost increases.
- To Sell: You move the curve leftward → you receive less per token.
3. No Dev Rugs
Since the entire process is handled by the Pump.fun contract: no dev wallet holds a bunch of tokens to dump on users. The tokens are fair-launched with zero supply pre-allocated to the creator. All token creators must buy in like everyone else.
4. Easy Trading
Once a token raises 84.985 SOL, the token is migrated for listings on PumpSwap and other decentralised exchanges. Pump.fun moves tokens that fulfil this requirement of raising 84.985 SOL to any DEX that supports pump.fun. This will make it easier for others to buy and track.
5. Easy Search
From the homepage, users can search for tokens using the name of the tokens or the mint addresses of these tokens.
6. Livestream Feature
Some tokens are attached to video livestreams, such as those shown below. Coin creators can use this feature to showcase their work, either educational, entertainment or degenerate acts.
7. It’s Viral
Because the barrier to launch is low and the meme culture is now pretty strong, tokens on Pump.fun tend to go viral quickly. Projects like $BONK, $POPCAT, and $WIF helped ignite the trend of memecoin speculation in the blockchain ecosystem through Solana.
Why is Pump.fun Popular?
Billions of dollars have been traded on Pump.fun because of some of the reasons below:
- Straightforward UX.
- Low cost to participate.
- Fun, gamified experience.
- Strong meme culture.
- Built on the fast and cheap Solana blockchain.
What is the Fee Structure of pump.fun?
Coin Creation Fees
If you create a coin but do not buy from it, it costs nothing but your regular transaction fee on Solana, but if you create a coin and then buy from it, you pay 0.025 SOL, which is paid to the Solana network for program transactions.
Trading Fees
Before the token “graduates” to an external DEX like PumpSwap, a 1% fee is paid, while a 0.25% fee is paid after the token graduates successfully. From this 0.25%, 0.2% goes to the liquidity pool (LP), and the remaining 0.05% goes to pump.fun.
Optional Fees
These are user-set fees that are not compulsory to optimize the trading experience on the token. A priority fee between 0.003 and 0.01 SOL is recommended, while a front-running protection fee of 0.01-0.03 SOL is also advised for MEV protection.
Conclusion
Pump.fun is a simplified gateway into DeFi economics. By abstracting bonding curves and market-making mechanics into an easy-to-use interface, pump.fun democratises token launches and invites everyone to play the game of speculation. Whether you're a developer, a degen, or a trader, Pump.fun proves that access to DeFi through tokens can be simplified and created fairly.