Solana’s Memecoin Market Struggles: What the Data on Pump Fun and Raydium Reveals About SOL’s Future

• Solana meme coin creation tool Pump.fun outshines Ethereum in 24-hour revenue.
• A crypto trader believes that the current data indicates an end of the meme cycle. 

The past few days have been an eyesore for individual crypto assets with almost all the meme tokens declining by 3% in the last 24 hours. According to our data, Solana’s (SOL) recent ecosystem decline of 5% within the same timeframe has negatively contributed to the failure of its meme markets. 

Dune Analytics data confirms this, revealing that the Solana meme coin creation tool Pump.fun has been witnessing a low success rate. Specifically, only 1.41% of Pump fun tokens successfully make it onto the Solana-based decentralized finance protocol Raydium.

February 16, this rate experienced an all-time high of 2.56%. However, it has hovered within the 1.41% and 1.21% range since May.

According to our research, tokens that are created on pump.fun does not immediately get listed on Raydium. Once a token attains a market cap of around $69k, Pump.fun automatically closes trading and migrates it to Raydium in a process called ‘filling the bonding curve’. Unfortunately, Cinneamhain Ventures’ Adam Cochran has observed that the “graduation rate” has remained stagnant in the past several months. On top of that, no new coin has achieved a $20 million Fully Diluted Valuation (FDV). Per his interpretation, this signals an end of the current meme cycle. 

Crypto Analysts Speak on the Pump.fun Situation

Confirming this is a crypto commentator and Web3 developer Bread. According to him, only 22,300 out of the 1.58 million tokens created make it to Raydium. Contrary to Cochran’s interpretation, Bread believes that this shows how easy Pump.fun makes it to create memecoin projects. This has made it popular among celebrities like Caitlyn Jenner, Iggy Azalea, and Jason Derulo using it to create and promote their meme projects. 

Contrary to its low success rate, Pump.fun’s 24-hour revenue has been quite impressive, outshining Ethereum on multiple occasions. On July 29, the Solana meme coin creation tool recorded a revenue of $864,000, compared to the $550,000 recorded by Ethereum. A similar situation occurred on June 30 when Pump.fun’s 24-hour revenue reached $2 million against Ethereum’s $1.91 million. 

Currently, Solana ranks first in terms of 24-hour revenue ($1.7 million), followed by TRON ($900,000). Pump.fun and Ethereum rank third and fourth, respectively. Pump.fun’s impressive performance also stems from the meme coin trading hype on its native Solana blockchain, which has attained a cumulative revenue of almost $75 million. 

With its low success rates, researchers estimate that the few that make it to the market record incredible returns. Recently, a trader bought 256 million CTO tokens with just 50 Solana tokens. In just an hour, he sold 227 million CTO to make a profit of around $800,000. With a $3,400 investment in another asset called PFI, the trader made a $104,000 profit. 

The overall impact of the Pump.fun situation on Solana’s future is unknown since its on-chain activities usually offset other negative metrics. 

At press time, SOL was trading at $150 after declining by 7.9% in the last 24 hours.