Pump.fun is a fast-growing Solana-based platform that allows anyone to easily create, trade, and speculate on meme-based tokens, commonly known as “memecoins.” The site has become a go-to destination for casual crypto enthusiasts and celebrities alike, offering simple tools for launching tokens with minimal costs and barriers to entry. However, as with any speculative crypto trend, Pump.fun also comes with notable risks.
How Does Pump.fun Work?
At its core, Pump.fun operates as a marketplace for new memecoins. Users can browse a grid of the latest tokens launched by others, view their price charts, and participate in buying and selling. The trading mechanism uses a bonding curve instead of a traditional order book, meaning token prices rise as more buyers come in. Popular wallets compatible with Solana—including Phantom, Metamask, and Solflare—are supported for easy participation.
When a token reaches a $69,000 market cap, it earns a listing on the decentralized exchange Raydium, with part of its supply deposited and burned, adding a gamified incentive for early buyers.
Also read: How to Create a Memecoin on Solana: A Step-by-Step Guide
How to Create a Memecoin on Pump.fun
Launching your own token on Pump.fun is surprisingly simple. Users can click “start a new coin” on the homepage, upload a catchy name and image, write a short description, link social media accounts, and pay a small fee of 0.02 SOL (roughly $3). This process is beginner-friendly, though users will need to fund their crypto wallet first via exchanges like Coinbase or Binance.
This ease of creation has led to an explosion of new tokens on the platform—some by influencers, some by casual users—though maintaining long-term value remains elusive for most.
Platform Risks and Security Concerns
While Pump.fun includes safeguards like fair launch requirements (no presales or insider allocations), the platform isn’t risk-free. An exploit by a former employee recently drained nearly $2 million, raising questions about the platform’s internal controls and transparency. Additionally, Pump.fun is closed-source, limiting third-party security auditing.
Given low liquidity and the speculative nature of many tokens, prices can crash without warning. Prospective traders should only risk money they’re comfortable losing.