Disclaimer: This post contains thoughts on crypto, a volatile and risky asset class. It is not investment advice, and you should do your own research. All information is for educational purposes only. Please don’t take risks with money you’re not willing to lose.

Few protocols have grown into billion-dollar revenue machines in under a year, let alone so decisively dominate one sector. Reigniting the Fat App Thesis in tandem, Pump.fun has done just that, and is now looking to own the entire stack.

Born as a simple bonding curve launchpad for memes on Solana, Pump.fun has quickly matured into a vertically integrated, zero-to-one financial casino with real cash flow and finally, a native token to match. With cumulative fees upwards of $850m, a new thriving AMM (PumpSwap), and a recent $1.3b ICO, Pump is genuinely throwing its hat in the ring to compete with the likes of Uniswap and other DeFi unicorns.

Yet, with all new success comes inevitable and in this case, justifiable FUD. Pump.fun has long been deemed a liquidity suck from those building real-world value, and the team’s poor communication post-launch has only worsened matters. Regardless, participants filled the raise in record time, still eager to bet on one of the few protocols that has consistently demonstrated its ability to monetize flow better than any competitor.

Behind the Curtain

Albeit a breeding ground for degeneracy and as it stands, a bet on the gambling economy, behind the seemingly chaotic landing page sits a remarkably well-oiled business that (currently) monetizes on two key vectors.

1. Primary Sale Fees

   When a user or dev (if we even want to call them that) launches a token, Pump.fun creates a bonding curve that algorithmically sets the token price as buyers enter. For every trade during this phase, a 1% fee is siphoned back to the protocol.

2. Secondary Trading

   Strategically recapturing value that previously went to Raydium and Orca is PumpSwap, the native AMM. After the initial bonding curve fills, trading migrates here, where every transaction is then charged with a smaller, but still meaningful 0.25% fee (0.20% to LPs and 0.05% to the protocol).

While simple, what ultimately makes the model sing is velocity. Tens of thousands of tokens are minted monthly, and although many are forgotten or rugged within hours, a small few explode. Despite the abysmal metrics of graduated tokens (those that fill their bonding curve), Pump.fun generates revenue regardless of whether the coin goes to zero or hits a billion dollar market capitalization. Similar to how Hyperliquid positions trading as the product, Pump isn’t necessarily hoping that one token sees massive success, just that there will always be demand for memecoins as a whole.

Together, this system has created a cash cow that even the largest DeFi protocols are now failing to rival. The traction is clear, but is this sustainable? Moreover, how much of that upside will now flow to native token holders?

$1.3b @ $4b FDV

On July 12, Pump.fun launched their long-expected native token (PUMP) following the third largest ICO in crypto’s history. The mechanics were intentionally minimalist, using their own launchpad and placing tokens under a 72-hour transfer lock before trading was enabled. The raise ultimately concluded in under 12 minutes, with over 10,000 unique wallets contributing and a median purchase price of ~$532.

Although both groups bid the same valuation, the raise was notably split between public and private investors ($600m to $720m, respectively). With a total circulating supply of 1t, the remaining allocations are industry standard despite the rather brief vesting schedules. However, as it stands, ‘Community & Ecosystem’ funds remain locked as early users desperately await what could easily become one of the most profitable airdrops of this cycle.

While the above tokenomics were publicly outlined, the launch unfortunately brought little to no clarity regarding intentions with the funds. Unlike infamous ICOs of the past (i.e. Ethereum), there was no whitepaper, promise of utility, or any pretense of the token garnering governance power. Albeit frightening from an investor’s perspective, it also marks a refreshing cultural shift to funding protocols that have already found PMF. Pump’s revenue was compounding aggressively, the product had cultural momentum, and the launchpad rails were proven to handle overwhelming volume. As such, PUMP doesn’t come as speculative infra, but rather a monetary wrapper around real usage.

A New Era

With the $1.3b raise and subsequent native token launch now in the rear view mirror, Pump.fun has officially entered a new growth phase where holders could potentially see some revenue redirected back to them. At the very least, it gives the team an opportunity to ‘reward’ the users that coughed up all those fees in the first place. PUMP may have no fundamental value today, but assuming this wasn’t one final cash grab, it would be safe to assume that its strategic potential is closely tied to the protocol’s expanding footprint and growing ambition to operate as vertically integrated memecoin empire.

From a business perspective, it’s clear that Pump.fun operates on a uniquely profitable base. It monetizes speculation directly at the point of creation, generating revenue every time someone launches a token (for reference, over 60k were created daily during January). Those launches, in turn, create secondary markets that drive usage, virality, and cultural stickiness. This is already functioning at scale.

The introduction of PUMP, however, introduces a new layer to the flywheel: monetization of attention. While nothing has been formally announced, the natural path forward is some form of revenue sharing, fee redirection, or a token sink tied to PUMP. This could include, but isn’t limited to:

• Buyback mechanisms (akin to Hyperliquid’s Assistance Fund)

• Discounts, boosts, or exclusive tooling

• Enhanced creator earnings (if they more heavily pursue livestreaming)

• Staking or vault models

Of the potential options, some version of an automated buyback system stemming from one of Pump’s two financial vectors seems most likely. After all, Hyperliquid’s implementation has effectively maintained both buy pressure and user loyalty. While Pump.fun may not be nearly as generous in deferring 97% of their total fees, even a mere quarter of revenue would be close to ~$135m annually. When compared to blue chips such as Raydium and Jupiter, Pump’s estimated net profit to token holders would be meaningfully higher.

Own the Stack

With what most have deemed an extractive business (still profitable), it begs the question what an additional $1b could be deployed for.

Going vertical means deepening control over the lifecycle of memecoins after launch. Pump.fun currently captures attention and liquidity at the moment of token creation, and temporarily let value slip downstream to third-party AMMs before introducing PumpSwap. Now profiting from both creation and trading, the obvious opportunity lies in filling the remaining gaps in its infrastructure.

• Strategic M&A: Pump could look to acquire or replicate products like Axiom, which currently dominates token discovery and analytics. Axiom has already generated more than $160m in fees this year, rivaling Pump’s own economics. This wouldn't just consolidate revenue, but patch a distribution hole that Pump doesn’t currently cover. In fact, they recently announced their first acquisition of Kolscan, a wallet tracker that monitors the activities of the top onchain traders.

• Additional Features: Expanding trading capabilities within PumpSwap to include perps and options is another path. Even if not CEX-equivalent, offering leverage or derivatives on memecoins would enable Pump to absorb more of the degenerate flow without ceding it to Binance and other T1 venues.

• Exchange Partnerships: If Pump doesn’t want to build a centralized exchange, they can partner. Imagine a pipeline where the top Pump.fun tokens graduate to CEX listings and PUMP holders get priority access.

All of these sharpen their moat. Controlling issuance, trading, and distribution makes Pump.fun a full stack memetic economy.

The other direction is cultural scale. Going horizontal means turning memecoins from a crypto-native game into mass-market entertainment.

• Mainstream Reach: Pump doesn’t necessarily need to replicate FTX’s $2b marketing run, but they can adopt a smarter version of the same playbook. Selective partnerships with sports organizations, streamers, or entertainment brands could bring memecoins into pop culture’s bloodstream without forcing any onboarding friction.

• Mobile-First Push: Pump’s Android app has quietly passed 100k downloads, and they truly haven’t leaned into it yet. A more aggressive mobile strategy centered on casual token trading, community feeds, and swipe-based discovery could onboard an entirely new cohort that isn’t using Telegram bots or desktop wallets.

• Livestreaming Creator Drops: Pump’s most powerful unlock may be turning token launches into live, creator-led events. By blending revenue sharing, gamified minting, and native audience monetization, they can convert streamers into distribution partners. For instance, a Twitch-native token drop where the chat can mint in real-time and trading fees flow back to the host. Hints below.

Vertical moves bring defensibility and compounding revenue, while horizontal moves build culture and brand. With $1b in capital and a native token to now route incentives, Pump.fun really has the optionality to do both.

In Sum

At the time of writing, PUMP trades at a fully diluted valuation of ~$2.5b, down from ~$7b post-launch highs, but still in line with early-stage L1s or pre-revenue exchanges. Critics point to the float-heavy structure and absence of protocol fee redirection. Zoom out and the business itself is still monetizing at an extraordinary clip.

Pump’s annualized fee revenue (based on June 2025 trailing data) sits at ~$780m, giving it a revenue multiple under 10x. That’s broadly in line with Solana’s current multiple and well below the levels Ethereum reached during prior growth cycles. For context, Raydium generates a fraction of the fees that Pump does, while Hyperliquid’s perps exchange, despite deeper trader tooling, hasn’t quite matched Pump’s user growth. Relative to these peers, Pump looks less like a short-term play and more like a serious, revenue-generating exchange with a consumer-first narrative.

If you index valuation to user growth and engagement, the bullish case gets stronger. No other protocol onboarded more first-time wallet users in Q2 2025. Pump.fun is likely already one of the most actively used frontends in crypto by daily sessions. With the capital from its raise, it now has the war chest to extend that lead into derivative markets, mobile, and creator platforms.

The current problem is supply. The PUMP token doesn’t redirect fees (yet), and emissions remain high. As more tokens unlock and early investors seek liquidity, the market may struggle to sustain current valuations unless some form of value return, either direct or implied, is shipped. This is why investors are closely watching for buyback announcements or other potential deflationary levers.

Ultimately, if PUMP does introduce meaningful value accrual and continues growing revenue at its current pace, it could cement itself as one of the most viable onchain exchanges. If it doesn’t, it risks fading into the churn of crypto’s attention economy.