As rumors of a token launch by Pump.fun resurface, the already fragile liquidity defenses on the Solana chain have been breached, tearing apart the market confidence that was still in recovery and rapidly heating up risk-averse sentiment on-chain.

With the news of Pump.fun's potential token launch circulating once again, the fragile liquidity defenses on the Solana chain have been breached, and the market confidence, which was still in recovery, has been shattered, leading to a rapid increase in risk-averse sentiment on-chain.

"Slot Machine" on the Chain: Only 3.6% of Users Profit Over $500

Recently, rumors of an upcoming token launch by Pump.fun have once again stirred up market turmoil. According to Blockworks, citing multiple sources, Pump.fun plans to raise $1 billion through a token sale, with a valuation of $4 billion. The tokens will be sold to both the public and private investors. Although the official launch time has not been confirmed, the platform's social media accounts hint that it may go live within two weeks.

In fact, this is not the first time such a token launch plan has been rumored. As early as February of this year, according to reports from Wu Blockchain, Pump.fun planned to issue tokens through a Dutch auction on a centralized exchange (CEX) and provided detailed token launch preparation documents to the CEX. However, at that time, market liquidity was significantly absorbed by the personal MEME coins issued by Trump and his wife Melania, leading to the plan's failure. Now, with the market environment slightly warming up, it seems that Pump.fun's token launch plan is back on the agenda.

However, this "money-printing machine" on the chain is facing a significant decline in market enthusiasm.

Pump.fun Token Launch Rumors Trigger MEME Coin Sell-off: Is Solana's "Toxic Asset" Living Up to Its Name?

According to data from Dune, as of June 4, the platform's cumulative revenue has exceeded $730 million, with a peak daily revenue approaching $15 million. However, since February 2025, the platform's revenue growth has significantly slowed down, with most daily revenues now stabilizing in the millions of dollars.

Pump.fun Token Launch Rumors Trigger MEME Coin Sell-off: Is Solana's "Toxic Asset" Living Up to Its Name?

In terms of trading volume, Pump.fun set a historical record of $3.3 billion in a single week at the end of 2024. Although there have been several rebounds to the $1 billion level since then, it has been unable to return to its peak. The weakening liquidity trend has, to some extent, diminished the platform's popularity and users' willingness to participate.

Pump.fun Token Launch Rumors Trigger MEME Coin Sell-off: Is Solana's "Toxic Asset" Living Up to Its Name?

Looking at token creation volume, Pump.fun has cumulatively created over 11.02 million tokens to date, with a peak daily token creation of 70,000 in January 2025. However, this figure has now dropped to an average of around 30,000 per day, indicating a decline in user participation enthusiasm.

Pump.fun Token Launch Rumors Trigger MEME Coin Sell-off: Is Solana's "Toxic Asset" Living Up to Its Name?

It is worth noting that behind the vast number of MEME coins, there are very few projects with significant market capitalization. According to Dune statistics, as of now, only 14 tokens have a market cap exceeding $50 million, and there are only 259 tokens with a market cap between $1 million and $50 million. The remaining approximately 14,000 tokens are all in the micro-cap stage. This indicates that the vast majority of tokens are still in the stage of internal trading without the ability to attract external funding.

Pump.fun Token Launch Rumors Trigger MEME Coin Sell-off: Is Solana's "Toxic Asset" Living Up to Its Name?

On the user front, Pump.fun is facing a cliff-like drop in new traffic, with old users barely holding on. Dune data shows that Pump.fun reached its peak in late January 2025, with the number of active wallets on a single day once exceeding 400,000. At that time, the influx of new users was the key to the surge in user numbers. However, as market sentiment cooled, the number of active wallets also declined, and the platform's activity now mainly relies on the reuse of old users, with a significant drop in new user contributions. This trend also confirms that many Pump.fun users frequently attempt to create and speculate on MEME coins, but very few projects can establish sustainable value, resulting in short user cycles and weak retention.

Not only that, but behind the get-rich-quick narrative of Pump.fun lies the naked survivorship bias. Dune data shows that this month, about 594,000 wallets participated in trading, of which only 3.6% of users achieved substantial profits of more than $500. More astonishingly, only 27 wallets made profits exceeding $100,000, accounting for just 0.0045% of all traders; and only 577 wallets achieved profits of more than $10,000, with a proportion of only 0.1%. In contrast, the proportion of losses is much higher, at 52.5%, including extreme cases of losses in the millions of dollars. These data clearly show that a very small number of whales have taken the vast majority of the profits, while the vast majority of retail investors are merely serving as liquidity fuel.

Pump.fun Token Launch Rumors Trigger MEME Coin Sell-off: Is Solana's "Toxic Asset" Living Up to Its Name?

With user growth peaking, token quality in question, and liquidity overdrawn, whether Pump.fun's token launch can stir market sentiment and support a valuation as high as $4 billion is a significant uncertainty.

Solana Risk-Averse Sentiment Heats Up, High-Valuation Token Launch Sparks Controversy

The news of Pump.fun's high-valuation token launch has led many investors to worry whether it will replay the last hurrah of ApeCoin (APE) when it was launched.

"The last king-level project with a $4 billion valuation was Yuga Labs, which launched APE and was hailed as the last glory of the bull market back then. After that, all the altcoins were cut in half. Now Pump.fun has the same $4 billion valuation, but the fundraising amount is more than double that of APE back then. The recent acceleration in listing frequency by various exchanges is probably an attempt to avoid the massive capital suction by PUMP in two weeks," tweeted crypto influencer @AB.

Pump.fun Token Launch Rumors Trigger MEME Coin Sell-off: Is Solana's "Toxic Asset" Living Up to Its Name?

Looking at the capital flow on the Solana chain, risk-averse sentiment is on the rise, with MEME coins collectively falling. According to CoinGecko data, over the past 24 hours, popular MEME coins in the Solana ecosystem have generally seen varying degrees of pullback. Meanwhile, data from Artemis shows that Solana has become the third-highest blockchain network in terms of net capital outflow over the past 24 hours.

Independent researcher @Haotian bluntly pointed out that Pump.fun's current valuation level is "extremely bubbly." The valuation of a MEME launching platform has surpassed that of most DeFi blue-chip protocols. He raised the following four core criticisms: (1) The excessively high and bubbly market valuation is quite unreasonable. Pump.fun's attention economy business model relies on the short-term, highly irrational FOMO of MEME coins in the market. In plain terms, it is a traffic monetization driven by "gambling." This means that Pump.fun's monetization capability is entirely a product of the short-term market spotlight effect, rather than a sustainable, normalized profit logic; (2) The fragile business moat is easily overtaken. Pump.fun has capitalized on the technological dividend of Solana's high performance and low cost, as well as the era dividend of MEME culture moving from niche to mainstream. This business model, which is built on someone else's infrastructure, is essentially a "tenant" business. If the Solana ecosystem undergoes significant changes, the fragility of its business model will be fully exposed; (3) The Launchpad's tool-like attributes make it difficult to form its own ecosystem. Currently, it is merely a "token issuance tool." To evolve from a pure Launchpad into a complex MEME economic ecosystem is inherently paradoxical: the core of MEME culture is simplicity, directness, and viral spread. Overloading the platform with functions will only strip it of its original "wildness"; (4) The ultra-high valuation will the original value innovation system. Pump.fun's ultra-high valuation is sending a dangerous signal to the entire industry: in the current Crypto ecosystem, the value of "traffic aggregation + speculative monetization" may outweigh that of "techn