the rise of the crypto platform

Continues to make headlines Pump.fun, the famous crypto platform for launching tokens on Solana.

According to a recent evaluation, the company that manages it could have a possible market value of 1.5 billion dollars. 

The evaluation of Pump.fun 

This evaluation was made starting from a news article by SecondLane.

In fact, on its official Telegram channel, SecondLane yesterday published a post in which it explicitly states that the FDV of Pump.fun is 1,500,000,000 dollars.

The FDV is the Fully Diluted Valuation (valutazione completamente diluita), a parameter used to estimate the future potential of a crypto project.

It is calculated by multiplying the price of a token by its total supply, that is, assuming that all its tokens are in circulation. 

While the market capitalization is calculated by multiplying the price of a token by the number of tokens actually in circulation (circulating supply), the FDV is obtained by multiplying it by the total number of tokens. 

So for example, Bitcoin currently has a circulating supply of about 19.8 million BTC, and with a price of about $95,000, it has a market capitalization of about 1.9 trillion dollars.

Its total supply, however, as is known, is 21 million BTC, so its FDV would be almost 2 trillion dollars. 

In other cases, the difference is greater, such as for XRP or TON, because the total supply is much higher than the circulating supply.

The token of Pump.fun 

Pump.fun, however, does not yet have its own token, so such calculations cannot be made. 

It should nevertheless be specified that these are purely theoretical and exclusively arithmetic calculations, which do not have a real significance in the physical world. 

Having said that, market capitalization is also calculated on the stock market by multiplying the number of existing shares by the price of a single share.

The calculation of the FDV of Pump.fun was carried out precisely by hypothesizing the total number of shares. 

The starting figures of this calculation derive from the listing on SecondLane of 1% of the shares of Pump.fun for 15 million dollars, and from here it is easy to calculate an FDV of 1.5 billion dollars. 

It is, however, possible that before the end of the bullrun, Pump.fun will launch its own token on the crypto markets. 

The value of Pump.fun

Nowadays, launching a token on SOlana is easy, fast, and economical. 

Anyone can do it, it’s just that at the moment of its creation, the token usually has a value of zero. 

For this reason, those who launch a token easily created from nothing in this way often feel the need to “pump it,” and Pump.fun serves precisely this purpose. 

Note that Pump.fun is not meant to give value to a token, but only to temporarily pump its price on the crypto markets, particularly on DEX where anyone can list a token. 

The tokens that are launched through Pump.fun generally follow a pump&dump scheme, consisting of an initial phase, the launch phase, in which the price is artificially pumped by increasing buying pressure, and a second phase in which inevitably there is the dump when profit-taking occurs and the buying pressure stops growing. 

The thing is well known to many of those who participate in these initiatives, although unfortunately not to everyone, and generally it is a sort of competition in which the winner is the one who buys very early and sells before the dump, and the loser is the one who buys too late and cannot monetize before the dump. 

Furthermore, about 98% of the tokens launched through Pump.fun are not successful.

It is possible, therefore, that the success of Pump.fun is also limited to the current bullrun, and that when the next bear-market begins, it will go out of fashion. 

It should be noted, however, that so far, Pump.fun has generated 86 million dollars in revenue thanks to the fees imposed on users, and from here comes the true current commercial value of the platform. 

The memecoin

The tokens launched on Pump.fun are fundamentally memecoin. 

The problem with memecoins is that they are tokens precisely linked to memes, and memes are in themselves fleeting phenomena that have one or more moments of glory (usually few), followed by a phase of oblivion. 

These initiatives could be likened to a gamble where there is a race to anticipate the pump, with the risk, however, that the pump does not occur. 

Sometimes they are even real scams, especially when those who created them invite others to buy them just while they are dumping them on the markets. 

The key to not losing out is to take advantage of the pump, that is, to sell when the price has risen, and not to wait for the price to rise to buy. Those who buy during the pump are simply giving money to those who anticipated it. 

It is important to emphasize once again that in most cases the pump never starts, so the majority of tokens created in this way never achieve any interesting results.