Pump.fun Raises $500 Million in 12 Minutes, Token Gains 325%

Pump.fun, a memecoin launchpad, successfully raised $500 million through its initial coin offering (ICO) on a Saturday, with the entire process concluding in just 12 minutes. The ICO sold 125 billion PUMP tokens, representing 12.5% of the total token supply, at a price of $0.004 per token. This rapid sale highlights the efficiency and streamlined nature of onchain infrastructure, which has significantly improved over the years.

As of the morning following the ICO, the PUMP token was trading at $0.017, indicating a 325% profit for those who participated in the ICO. The sale attracted 10,145 unique addresses, with a remarkably equitable median investment of $537. Notably, a larger number of investors came from decentralized exchanges (DEXs) on the Solana network, including Raydium, SolFi, and Jupiter, compared to centralized exchanges (CEXs).

Pump.fun's ICO, while substantial, is not the largest in history. EOS' ICO in 2017-18 remains the record holder with $4.1 billion raised, and Telegram's 2018 ICO also raised $1.7 billion in two phases, although the GRAM tokens were later refunded due to regulatory issues. In comparison, Ethereum's ICO in 2014 raised approximately $18 million in bitcoin over 42 days. These comparisons, however, are not direct due to differences in time, market conditions, and product types.

Unlike previous ICOs, Pump.fun is not just a proof-of-concept but a profitable venture. Since its inception in January 2024, Pump.fun has generated $786 million in cumulative revenues, translating to an annualized revenue of $377 million for the two-year-old company. The platform plans to share 25% of its revenues with token holders, adding potential value to the PUMP token. Analyst Ryan Connor from Blockworks Research noted that there is a high probability that the PUMP token will have some value accrual mechanism.

Pump.fun aims to disrupt the social media market, with ambitions to challenge platforms like Facebook, TikTok, and Twitch. The company plans to leverage its livestreaming feature, which was reintroduced in April after a controversial removal the previous year. Livestreamers on Pump.fun receive 0.05% of all trading fees from their tokens, providing a cost-effective way to monetize their content. This strategy allows Pump.fun to capitalize on the growing trend of internet celebrities and content creators, offering them a modest but valuable revenue stream.