The integrity of the altcoin market on Solana took a hit with revelations from a detailed examination of Pump.fun, an altcoin issuance platform. Solidus Labs uncovered that from January 2024 to March 2025, over seven million altcoins launched via Pump.fun had a dismal 1.4% continuance rate. This stark statistic means a staggering 98.6% of these altcoins participated in dubious schemes such as rug pulls and pump-and-dumps, significantly harming investors that got drawn in by the platform’s enticing features.
Pump.fun Stats Raise Eyebrows
A daily trading volume exceeded 100 million dollars on Pump.fun, largely driven by short-lived profit hunters. Research by Pine Analytics during the same timeframe identified the “same-block sniping” tactic, allowing token creators advantages during the coin launch. On Raydium DEX, investigation revealed that 93% of the studied 388,000 liquidity pools engaged in abrupt liquidity extractions.
Solidus Labs discovered through rigorous analysis that out of the 7,050,000 coins with at least five transactions originating from Pump.fun, only a scant 97,000 maintained liquidity over one thousand dollars. The remaining 98.6% rapidly depreciated in value, indicating fraudulent schemes.
The platform’s automated market maker (AMM) and price-multiplier bonding curve model amplified prices with each transaction. Early adopters enjoyed substantial returns, whereas latecomers bore the brunt of losses, escalating the victim tally as the platform gained traction.
Will Legal Actions Dismantle Pump.fun?
Pump.fun encountered class-action lawsuits in January, facing allegations of flouting U.S. securities regulations. These lawsuits highlighted unregistered coin offerings and the imposition of approximately 500 million dollars in fees, further eroding trust among investors.
In December, offensive live streams led Pump.fun to suspend its broadcasting feature, precipitating a drastic decline in weekly revenues from 22 million dollars to nearly zero. This revenue drop aligned with regulatory scrutiny, as evidenced by on-chain data.
Key understandings from the unraveling of Pump.fun:
- Vast majority (98.6%) of altcoins became worthless, akin to Ponzi schemes.
- Pervasive “same-block sniping” manipulated coin issuance on popular DEXs.
- Legal challenges emphasize shifting regulatory landscapes for crypto ventures.
- Suspension of platform features leads to significant revenue losses.
Cautiousness is advised by specialists against schemes exploiting swift liquidity withdrawals and the boundless creation of new coins. The fraud detected within Solana’s network pushes for a reevaluation by regulatory bodies and exchange services of their monitoring strategies.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
Source: https://en.bitcoinhaber.net/pump-fun-scandal-shakes-solana-ecosystem