What is Pump.fun? A Gateway to Meme Coin Creation and Trading

Before Pump.fun, creating a cryptocurrency often demanded deep understanding of smart contract coding. It also required substantial capital for initial liquidity and intricate marketing strategies. These barriers meant experienced developers or well-funded teams largely controlled new coin launches. Pump.fun, however, abstracted away these complexities. It transformed the token creation process into a few simple clicks.

The main question is, what is Pump.fun? This document aims to provide a comprehensive and clear understanding of the platform. We will delve into its core functionalities, its distinctive approach to token launches, and why it has garnered so much attention as the “ground zero” for meme coins within the crypto community.

What is Pump.fun?

Pump.fun is a revolutionary platform on the Solana blockchain that has completely transformed how new cryptocurrencies, particularly meme coins, are created and traded. Its core mission, therefore, is to democratize token issuance, making it incredibly simple for anyone, through its user-friendly interface —even those without coding skills or significant funds—to launch their own digital asset ideas quickly and easily.

Unlike traditional token launches that, by contrast, demand complex smart contract coding, substantial capital for initial liquidity, and intricate marketing strategies, Pump.fun strips away these complexities. Consequently, users can create a new coin in just minutes by inputting a name, ticker symbol, description, and uploading an image.

Furthermore, the associated fee is remarkably low, often less than two dollars, thereby making it accessible to virtually anyone. Once created, moreover, these tokens become instantly tradable directly on the Pump.fun platform, operating on an ingenious bonding curve pricing model. This ensures immediate liquidity; prices automatically adjust upwards as tokens are bought and downwards as they are sold, theoretically rewarding early participants.

For more: Solana Memecoin War Heats Up with Pump.fun and Believe Rivalry

Key Features of Pump.fun

Pump.fun boasts an automated “graduation” process, a truly distinctive feature. When a newly launched token reaches a specific market capitalization threshold (for example, $69,000 on Solana), the system automatically deposits a portion of the liquidity from the bonding curve into a major decentralized exchange (DEX) like Raydium or PumpSwap. Crucially, it then burns the Liquidity Provider (LP) tokens for this transferred liquidity. This action makes the liquidity permanent. It largely eliminates the risk of “rug pulls”—a common scam where creators withdraw funds and crash the token’s value.

Furthermore, Pump.fun operates on a “fair launch” philosophy. This means no pre-sales, private allocations, or initial tokens go to the creators themselves. Creators must buy their own tokens on the same bonding curve as everyone else. This fosters a more equitable starting point for all participants. While the ecosystem is dynamic and offers unparalleled accessibility, the meme coin market remains inherently speculative and volatile. Users should always exercise caution.

Pump.fun Coin (PUMP), Team, and Investors

The Pump.fun Coin (PUMP) (Rumored)

As of the current date (June 2025), Pump.fun does not have its own native token that is publicly traded or officially confirmed. However, there are strong rumors of a “PUMP” token launch with significant speculative tokenomics:

• Targeted Fundraising: Rumored to be targeting $1 billion.
• Targeted Valuation (FDV): Rumored to be targeting a $4 billion valuation.
• Airdrop: Speculation suggests a 10% airdrop allocation to the community.

The rumored launch faces skepticism, with critics arguing it could be a “profit-taking” move by the pseudonymous team given Pump.fun’s massive historical revenue (over $700 million) derived from a model where a high percentage of launched tokens are scams. The necessity of a large raise when the platform already generates significant revenue is also questioned.

The Team Behind Pump.fun

The team behind Pump.fun largely operates pseudonymously, with the moniker “Alon” commonly used to refer to its co-founder. Public documents, however, have reportedly identified the co-founders as Noah Tweedale, Alon Cohen, and Dylan Kerler. Their stated motivation for creating Pump.fun was frustration with existing meme coin trading risks and rug pulls. 

The pseudonymous nature of the team, coupled with controversies like the temporary deactivation of their live streaming feature in late 2024 due to problematic content and a recent hack of their X account (June 2025), has raised questions about the platform’s transparency and governance.

Founder: Alon Cohen

Investors and Funding

Pump.fun has generated substantial internal revenue, exceeding $700 million cumulatively (as of June 2025) primarily through token creation and trading fees. This significant self-generated capital suggests less reliance on traditional venture capital funding for initial operations. 

Pump.fun Revenue

However, PitchBook data indicates Pump.fun has raised $350,000 in seed funding from investors including 6th Man Ventures, Big Brain Holdings, Mechanism Capital, Daxos Capital, and Alliance (Accelerator). These early investments likely predated the platform’s explosive growth and massive self-generated revenue, which now positions it for a potentially large independent token sale.

For more: Pump.fun Revenue Declining – Is Liquidity Flowing to BNB Chain?

How does Pump.fun work?

Pump.fun has revolutionized meme coin launches. It created an incredibly streamlined process, making token creation and trading accessible to almost anyone. At its core, the platform operates on a unique bonding curve model. This combines with an automated “graduation” system to external decentralized exchanges.

First, token creation is entirely no-code and low-cost. Users simply connect a Solana wallet. They pick a name, symbol, upload an image/video, and add a description. For a small fee, Pump.fun instantly mints 1 billion tokens for a new meme coin. Crucially, creators cannot pre-mine or allocate tokens to themselves; they buy their own token like any other user.

Immediately after creation, tokens become tradable directly on Pump.fun. A bonding curve mechanism handles this. This mathematical formula algorithmically sets the token’s price: as users buy more tokens, the price increases along a predefined curve, and vice versa. About 80% of the total token supply goes to this curve. This ensures instant liquidity from creation without initial external liquidity pools. This system incentivizes early buyers. They get tokens at lower prices, fostering a competitive, high-FOMO environment.

Source: Bonding Curve

The final key phase is token “graduation” to external DEXs. A token automatically “graduates” once it reaches a specific market capitalization, historically around $69,000. Pump.fun then uses a portion of the SOL collected from the bonding curve (e.g., $12,000-$17,000 worth) to create a permanent liquidity pool on an external Solana DEX, like PumpSwap (Pump.fun’s own AMM) or Raydium. The platform typically burns the Liquidity Provider (LP) tokens for this pool. This helps prevent creators from “rug pulling” by removing liquidity after graduation. Afterward, the token trades on the external DEX like any other cryptocurrency, driven by open market dynamics.

Pump.fun generates revenue through a small creation fee, a 1% “swap fee” on bonding curve trades, and a graduation fee. Since May 2025, creators also receive 50% of the fees generated from their tokens. This further incentivizes platform activity. This streamlined process and Pump.fun’s key features have made it the go-to platform for meme coin launches. While democratizing access, it also leads to a massive influx of speculative and often fraudulent tokens.

How to create a coin on Pump.fun?

Creating a coin on Pump.fun is designed to be very straightforward, even for those with no technical exercise or background in blockchain or coding. Here’s a step-by-step guide:

1. Prepare Your Solana Wallet and SOL

• Get a Solana-Compatible Wallet: You’ll need a non-custodial Solana wallet, such as Phantom or Solflare. These are widely used and user-friendly. Make sure to set one up if you don’t already have one.
• Fund Your Wallet with SOL: You’ll need a small amount of Solana (SOL) in your wallet to cover the creation fee and potentially for an initial purchase of your token. The creation fee is typically very low (around 0.02 SOL, which is less than $2 USD). It’s wise to have a bit more than that (e.g., 0.1 – 0.5 SOL) to cover any initial transactions. You can acquire SOL from major cryptocurrency exchanges and then transfer it to your wallet.

2. Visit the Pump.fun Website
3. Connect Your Wallet

On the Pump.fun homepage, you’ll see a “Connect Wallet” button (usually in the top right corner). Click it and follow the prompts from your chosen Solana wallet (e.g., Phantom) to connect it to the platform.

Connect Your Wallet

4. Start a New Coin

Look for an option like “Start a new coin” or “Create Token” on the Pump.fun interface. Click on it to begin the creation process.

Start a New Coin

5. Define Your Token’s Identity:

You’ll be prompted to enter a few key details for your new coin:

• Name: This is the full name of your cryptocurrency (e.g., “My Awesome Meme Coin”).
• Ticker Symbol: A short, unique abbreviation for your token (e.g., “MAMC”). This is what people will see on charts and exchanges. Keep it concise (usually 3-5 characters).
• Description: A brief, engaging summary of your token. This is where you can explain its purpose, theme, or simply its meme potential. You can also include links to your social media (Twitter/X, Telegram, Discord) to build a community.
• Image/Logo: Upload an image or logo that visually represents your token. This is crucial for attracting attention, especially for meme coins. Aim for good quality and a memorable design.

Define Your Token’s Identity

6. Review and Deploy:

• Once you’ve filled in all the details, review everything carefully to ensure there are no typos or mistakes.
• The platform will show you the small fee required to deploy your token.
• Confirm the transaction in your Solana wallet.

Your coin is live! After the transaction is confirmed, your token will be successfully created and immediately live on Pump.fun! You’ll be directed to its trading page on the platform.

7. (Optional but Recommended) Initial Purchase of Your Coin:

As the creator, you’ll have the opportunity to make an initial purchase of your own token. It’s often recommended to buy a small amount to establish an initial stake and demonstrate confidence in your project, especially for meme coin enthusiasts. This can also help prevent “snipers” (bots that automatically buy new tokens) from acquiring too large a portion of the initial supply.

What Happens Next (The Bonding Curve and Graduation): How to trade meme coins effectively.

• Bonding Curve: Your token’s price will operate on a bonding curve. As more people buy your token, its price automatically increases. As people sell, the price decreases.
• Graduation to DEX: If your token reaches a certain market capitalization (historically $69,000, though this can change), a portion of its liquidity will automatically be deposited into a larger decentralized exchange like Raydium (or PumpSwap, Pump.fun’s own DEX). This is often called “graduation” and significantly increases your token’s visibility and trading volume on the broader Solana ecosystem.

Important Considerations and Risks:

While Pump.fun offers unparalleled ease, the memecoins market is highly speculative and presents significant risks. Its volatile nature means token prices can fluctuate dramatically, and many tokens launched do not gain significant value or fail entirely. Token utility is often minimal, with value driven purely by hype and community engagement.

Security concerns and the possibility of market manipulation are ever-present. Despite Pump.fun’s fair launch and anti-“rug pull” features for graduated tokens, users must exercise caution. There is always a risk of potential scams or developers abandoning projects once initial profits are made, leaving early adopters and later investors falling victim. 

This speculative nature means that while the promise of quick profits is attractive, thorough research and informed participation are paramount. Pump.fun’s increasing popularity as a solana based platform and a significant player in the meme coin market makes it crucial for seasoned traders and newcomers alike to understand these dynamics. Despite efforts to maintain market stability through its unique features of Pump.fun, the inherent characteristics of community driven cryptocurrencies mean that success, leading to successful tokens, remains highly unpredictable.

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