Solana News Today: Pump.fun Buys Back 2.99 Billion PUMP Tokens, Price Jumps 22%

Pump.fun has taken immediate action to stabilize its PUMP token, initiating its first buyback just a day after the token's launch. This move was prompted by a need to prevent the token from slumping in value. The platform's intervention involved using SOL to buy back PUMP tokens, which successfully propped up the token's price. Following the buyback, PUMP recovered to $0.006, marking a 22% increase in the past day, despite a slow trading momentum.

Pump.fun spent 118,350 SOL to purchase 2.99 billion PUMP tokens, which were then transferred to another wallet. The platform has also received 187,770 SOL, valued at $30.59 million, from fee wallets. Currently, Pump.fun holds 69,420 SOL worth $11.48 million, indicating a potential for further PUMP token purchases. The platform's reserves, combined with its fee income, suggest a continued ability to buy back PUMP tokens over time.

Pump.fun's reserves have been bolstered by the rapid completion of the PUMP presale and the retention of some SOL from fees. The platform has not yet announced a token burn program, leaving the future use of PUMP reserves uncertain. However, the recovery of SOL to $164.02 has enhanced Pump.fun's ability to reinvest its reserves. The primary goal of the PUMP token is to share some of the platform’s revenues, avoiding the typical fate of airdrop tokens. The buybacks began shortly after initial whales liquidated their stakes and others took short positions, betting on a PUMP crash.

Despite the buybacks, PUMP remains a low-float token with a market capitalization of $2.35 billion and a fully diluted value of $6.65 billion. The token's initial low liquidity and reliance on Raydium and Meteora pairs led to a 56% dip following its launch. However, PUMP has since recovered to $27.5 million in liquidity on its Raydium pairs. The token is still in its early price discovery stage, and some anticipate further growth in liquidity as more centralized pairs are launched.

After the initial wave of whales shorting PUMP, there has been a return to long positions. Nearly 70% of whale positions are now long, suggesting an expected price recovery. The token is still viewed as reliable, despite concerns about potential insider whales. PUMP aims to replicate the utility of HYPE tokens by sharing the revenues of Pump.fun and the PumpSwap DEX. A total of 89 whales have taken up PUMP positions, up from 75 on the first day of trading. PUMP saw $2.15 million in short liquidations over the past 24 hours, countering the initial bearish sentiment.

The utility of PUMP will be closely scrutinized in the coming days, as overall Pump.fun revenues have declined. The meme platform is shifting its focus from top meme assets to PUMP. During peak meme activity, the platform generated over $13 million in daily fees. Currently, fees reach $1.34 million, with occasional dips below $1 million daily. Pump.fun is also facing competition from LetsBonk, which is currently attracting the bulk of meme activity.