Pump.fun's High Failure Rate Revealed: 98.6% of Memecoins Never Launch

The world of memecoins is known for its high volatility and speculative nature. Recent data from Dune Analytics sheds light on a troubling trend within this segment.

According to the data, a staggering 98.6% of memecoins created on the Solana-based platform Pump[dot]fun never actually launch. 

Platform Overview and Statistics

Pump[dot]fun, launched in January 2024, offers an easy way for users to create and launch memecoins. With fees as low as $2 and a transaction cost of just 0.02 SOL (approximately $3.50), it promises an accessible entry point into the memecoin market. 

Despite its user-friendly approach, the success rate of tokens transitioning from Pump[dot]fun to Solana’s decentralized finance (DeFi) protocol, Raydium, is alarmingly low.

Data reveals that only 1.41% of tokens from Pump[dot]fun manage to make it onto Raydium. This success rate has been relatively stable, fluctuating between 1.21% and 1.41% since May, with an all-time high of 2.56% recorded in February. 

The stagnation in the 'graduation rate' of coins—those reaching a market cap of $69,000 and being listed on a decentralized exchange (DEX)—further highlights the challenges.

Celebrity Endorsements and Market Impact

The memecoin frenzy has been significantly influenced by celebrity endorsements. High-profile figures like Caitlyn Jenner, Iggy Azalea, and Jason Derulo have launched and promoted their own memecoins on Pump[dot]fun. 

For instance, Jenner’s memecoin (JENNER) reached a market cap of $40 million within 24 hours of its launch, despite initial skepticism about its authenticity.

Following Jenner’s success, Iggy Azalea’s memecoin (MOTHER) also gained attention but has since experienced a sharp decline in value.

Other celebrity-linked tokens, such as Davido’s Timeless Davido (DAVIDO) and Rich the Kid’s Rich (RCH), have faced similar issues. The DAVIDO token has been criticized for pre-mining and alleged token dumping, while the RCH token saw its market cap plummet by over 90%.

Revenue Generation and Platform Performance

Despite the high failure rate of tokens, Pump[dot]fun has been financially successful. The platform charges a 1% transaction fee on tokens until they reach a certain market cap, contributing significantly to its revenue. 

On July 29, Pump[dot]fun generated approximately $864,000 in a 24-hour period, surpassing Ethereum’s $550,000 for the same timeframe.

This revenue model has proven lucrative, especially given the high volume of memecoin transactions. Pump[dot]fun’s ability to attract users with minimal fees and a promise of fairness has played a key role in its financial success.