Original author: Frank, PANews
Pump.fun has recently caused a public opinion crisis. The US law firm Burwick Law filed a lawsuit against Pump.fun and the fraudulent project on behalf of investors who lost money on the platform. Burwick Law said that this announcement was released after working with investors for several months, and also called on more victims to fill in registration information. In addition, a week ago, there were only 55,000 addresses on social media that had profits of more than $10,000 on Pump.fun, which also caused a lot of discussion. Pump.fun founder Alon had to stand up and respond to inaccurate data. It seems that behind the players contribution of a large amount of handling fees and interaction volume, who is the biggest winner of Pump.fun has become a topic of more concern to everyone.
A free casino or a hotbed of conspirators?
Regarding the news that Burwick Law took legal action against Pump.fun, many crypto KOLs also joined the discussion. The well-known on-chain detective ZachXBT said: Degenerate gamblers voluntarily chose to gamble in the micro-market value MEME tokens and are not actual victims or investors.
In response, Burwick Law posted the opinion of its partner Max Burwick: As in casinos, regulated gambling is defined by rules and unchangeable statistics. Imagine if you went to a casino where the dealer could rug pull a card game, would you make the same argument as here?
In fact, ZachXBT and Max Burwick’s opinions basically represent two attitudes of the public towards suing Pump.fun. Some people believe that trading on Pump.fun is voluntary, and suing is a pure expression of being unable to afford it. In addition, from a mechanism point of view, Pump.fun also reduces a lot of fraud risks in MEME. Others believe that Pump.fun charges a lot of fees, but allows some addresses to manipulate the market and does not review the content, so it should be sued.
Of course, we still don’t know whether Pump.fun violated relevant regulations, and whether this lawsuit will be a victory for investors or turn into a farce.
How many winners are there on Pump.fun?
But in addition to this, how much profit do users on Pump.fun make? Who is the biggest profiteer on Pump.fun? This information may be more meaningful to ordinary users. PANews has made some summary and analysis of Pump.funs long-term data.
In fact, as early as January 11, the discussion on social media about the number of addresses on Pump.fun with profits exceeding $10,000 was only 55,000 (accounting for 0.408%), which caused a stir. Alon, the founder of Pump.fun, also responded to this, saying that this statistic was inaccurate. The reasons are: 1. The purchase of tokens that have been bound to Raydium is not included, and most of the gains are generated after the tokens are bound. 2. Unrealized profits are not taken into account. 3. Many of the more than 13 million traders are robots and AI agents. About 30% of the wallets have only made one transaction, and these wallets cannot be real people.
Here Alon is referring to the data table of Pump.Fun Alpha Wallets created by @adam_tehc on Dune. It should be noted that Alon did not say that the data about @adam_tehc was distorted, but believed that the data was not complete enough to explain the profitability of Pump.fun users.
PANews will also partially use the data from several Dune dashboards created by @adam_tehc in subsequent analysis, but will only use basic statistical data, such as the total number of addresses, transaction volume, cumulative revenue, etc. In addition, since there is no direct user profit and loss analysis data, the following analysis uses the existing data for analysis, estimation, and inference. This analysis method may not be very accurate, but it is hoped that it can explain some problems from certain perspectives.
Since there are many data categories used, some basic data are listed here first (data as of January 16):
Pump.fun Total revenue: $416,810,737 ($416.8 million)
Pump.fun Total tokens issued: 6,096,526 (6.096 million)
Pump.fun Total user addresses: 14,130,923 (14.13 million)
Pump.fun’s revenue in the past 30 days: 105,182,383 ($105 million, this figure is a bit high, mainly because Pump.fun did several revenue aggregations on other DEXs in January).
Total cumulative transaction volume: 36030577862 (US$36 billion, Note: This data is from April 22, 2024 to January 6, 2025. The cumulative revenue on April 22 is approximately US$9.65 million. Based on the 1% handling fee, the total transaction volume before that is approximately 965 million. Therefore, the estimated cumulative transaction volume is approximately US$37 billion)
The average proportion of graduated tokens is 1.42%.
The above data is from @adam_tehc’s Pump.Fun data on Dune.
Number of transactions on Pump.fun in the last 30 days: 113,540,000 (113 million)
Active addresses for Pump.fun in the past 30 days: 7795520 (7.79 million)
The above data comes from the Solana browser Pump.fun Program data.
In addition, PANews also randomly counted 5,252 transactions on January 16 for 7 tokens that were about to be fully utilized on Pump.fun. Through transaction behavior analysis, it was found that there were 36 robot addresses and 909 real users.
The official income for each token issued is $68
Based on the above statistics, PANews calculated some data and obtained the following analysis results:
Token data:
Based on the total number of coins issued and total revenue data, we obtained an average official fee income of US$68 per token.
Based on total trading volume and total token issuance, we calculated that the average trading volume per token is approximately $6,074.
Users data:
Based on the total revenue and total number of users, it can be calculated that the average contribution of each user to the official platform is approximately US$29.49.
Based on the total revenue and the total number of transactions in the past 30 days, it can be calculated that the revenue contributed by each transaction is approximately US$0.92. Based on the fee rate level of 1%, it can be estimated that the average single transaction size of users in the past 30 days was approximately US$92.63.
Based on the data from the past 30 days, we found that each user conducted an average of 14.56 transactions in the past 30 days, and each address contributed $13.49 in fees. Based on the overall user contribution of $29.49 in fees, it is estimated that the average number of transactions per address is about 31.8.
At this point, let’s review the data we obtained above: on average, a single address conducted 31.8 transactions, and the average transaction size was approximately US$92.63.
Combined with the basic data of the token, we can calculate that the average number of transactions generated by each token is about 65.5 transactions, the average number of transactions a user participates in with a token is about 5.5 times, and the average number of addresses involved in each token is about 11.79 addresses.
70% of users’ profits are taken away by the authorities?
Next, we estimate the following ideal situation. Assuming that all users have a chance to buy graduated tokens, when these tokens are listed on Raydium, all users can sell them at double the profit each time, and the transaction scale each time they buy is the average transaction scale. Of course, in this process, for ease of understanding, we will assume that there is a user whose data is exactly the average value, named Averager.
According to the above calculation results, we know that the graduation rate of tokens on Pump.fun is 1.42%, which means that the winning rate of this average player is about 1.42%. The transaction size of this average player is $92.63 each time, and he has made a total of 31.8 transactions from the beginning to now. Based on this data, we can calculate that this average player has bought a total of 0.45 graduation tokens, and after doubling the sale, he earned $41.88.
During this process, the “averager” spent $29.49 in transaction fees. Of course, only his transaction fees are calculated here, and the amount of loss due to his personal operations is not calculated. We assume that he is lucky every time he trades on the internal market. Even if he fails to buy the graduated tokens, he can break even every time without loss.
According to the above algorithm, we can see that under extremely ideal conditions (not considering losses), users can get an average profit of about US$41.88, but the handling fee they need to pay is as high as US$29.49. That is, under this relatively ideal income situation, Pump.fun basically takes away 70% of the users profit.
If such calculations are true, it may not be difficult to explain why so many investors are pointing the finger at Pump.fun officials.
Of course, the calculation here may deviate from reality. For example, the overall profit margin of internal players may be greater than 1 times after listing on Raydium. However, this is unlikely. Most tokens quickly return to zero after listing on Raydium. For example, on January 17, a total of 48,631 tokens were issued on Pump.fun within 24 hours, and 697 tokens graduated in the same period. In the same period, the number of tokens newly listed on Raydium with a market value greater than 81,000 US dollars (graduation market value) and more than 100 transactions was 214, which means that only 30% of the tokens can maintain the graduation market value after listing on Raydium.
Finally, the above data calculation method is an estimate and extrapolation, and cannot fully represent the facts. However, judging from the overall data, the Pump.fun team is the biggest beneficiary of this MEME craze. The early release of official data will provide guidance and basis for users and better illustrate the problem.
