Pump.fun Faces Severe Cut in Token Production Amid Market Decline

The “meme token factory” Pump.fun has experienced a sharp decrease in the number of tokens that make it to the listing on the decentralized Solana exchange Raydium. This decline comes amid waning interest in meme coins and a significant market correction.

Pump.fun enables the creation of tokens based on the bonding curve model, where the price increases with the growing number of buyers. When a token’s market capitalization reaches $100,000, it is listed on Raydium. At that point, Pump.fun injects approximately $17,000 worth of liquidity and burns LP assets to mitigate the risk of a rug pull.

In January, the meme coin sector saw a surge driven by the launch of tokens associated with Donald and Melania Trump (TRUMP and MELANIA). Anticipation grew following the release of LIBRA, which is indirectly linked to Argentina’s president, Javier Milei.

Consequently, on January 23, Pump.fun witnessed a record issuance of tokens—71,735, according to Dune Analytics. Assets dependent on the platform recorded a daily trading volume of $3 billion.

Last month, 24,008 tokens were sent to Raydium, but this month, the number has dropped to 11,532, as reported by a user on X with the handle nooman.eth.

The decline in interest for Pump.fun correlates with a broader correction in the meme coin segment. Over the past 30 days, the GMCI Meme Index, reflecting the market capitalization of major “funny coins,” has fallen by 30%, and by 45% since the beginning of the year.

In January, two law firms demanded that the platform remove meme coins that infringe on their clients’ intellectual property, including company names and logos.

That same month, Pump.fun faced a class-action lawsuit concerning the offering and selling of unregistered securities with “high volatility,” resulting in nearly $500 million in fees.

It is worth mentioning that on February 26, the platform’s account was hacked to promote fraudulent governance tokens and meme coins HACKED and hackeddotfun, although the project team regained access to the account the same day.

Previously, analysts at Bernstein projected that as regulatory environments evolve, liquidity in the cryptocurrency market would begin to flow back from “funny coins” to DeFi projects, NFTs, and gaming tokens.