What is Pump.fun & How to Create a Coin

What is Pump.Fun?

Pump.fun is a platform for trading memecoins, focused on simplifying token creation and trading on the Solana and Blast blockchains. Launched in early 2024, it enables no code, one-click creation of new meme coins with just $2 in initial liquidity seeded. 

The platform generates revenue through a 1% swap fee and a 2 SOL charge when tokens reach the liquidity needed for listing on Raydium, a Solana-based exchange. This approach has led to significant financial success, with over $346 million in revenue within the first six months, making Pump.fun one of the most profitable crypto apps.

The project is managed privately by its anonymous founders, but it was initially supported by Alliance DAO, a venture firm with backing from noted investors QW Qiao and Imran Khan.

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How to Create a Pump.fun Coin

Creating a token on Pump.fun is simple and involves just four steps:

1. Visit Pump.fun and Connect Your Wallet: Go to the Pump.fun homepage and connect your Solana wallet. Phantom is the recommended wallet for this process.
2. Start a New Coin: Click the Start a New Coin button located at the top of the page.
3. Enter Coin Details: Fill in the details for your memecoin, including the name, ticker symbol, a brief description, and an image. You can also add social links for platforms like X (formerly Twitter), Discord, and others.
4. Seed Initial Liquidity: Provide $2 worth of SOL to seed the initial liquidity. This will automatically launch a bonding curve that facilitates liquidity for buying and selling your coin.

Following these steps will have your Pump.fun coin up and running in no time, ready for trading and interaction on the platform.

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How Does Pump.fun Work?

Pump.fun employs a bonding curve model to simplify meme coin creation and trading on Solana and Blast. Here is a quick overview of how it operates for a deeper understanding:

1. Token Creation: Users create tokens by choosing a name, ticker, and image. For a small fee (around $2), the token is deployed on Pump.fun, with 800 million tokens allocated to the bonding curve from a total supply of 1 billion.
2. Bonding Curve Pricing: Token prices are set by the bonding curve, increasing with demand. Early buyers get lower prices, with costs rising as more tokens are purchased.
3. Market Cap for Listings: To list on decentralized exchanges like Raydium, tokens must reach market cap thresholds—$69,000 for Solana tokens and $420,000 for Blast tokens. Approximately 86 SOL is needed to progress to this phase.
4. Liquidity and Burn: Upon meeting market cap goals, Pump.fun adds $12,000 in liquidity for Solana tokens to exchanges like Raydium, boosting trading. A portion of this liquidity is then burned, reducing token supply and potentially increasing value.

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Does Pump.fun Have a Token?

Pump.fun does not currently have a native token. The platform raised funds privately through Alliance DAO, leaving open the possibility of a future token launch. 

Pump.fun did, however, introduce $TEST, the first memecoin on the platform. This token briefly reached a $10 million market cap but has since dropped to around $200,000 as interest waned among crypto users.

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Is Pump.fun Safe?

Pump.fun facilitates the simple creation of meme coins and has kick-started a boom in Solana meme culture, but it still involves significant risks. Although the platform avoids presales and insider allocations to mitigate rug pulls, its open design still allows for potential scams and price manipulation. 

Token creators can dump large holdings, causing sharp price declines. Users should thoroughly research tokens and recognize the high volatility and risk of loss. Only invest what you can afford to lose.

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Bottom Line

In conclusion, Pump.fun offers an accessible way to create and trade memecoins, driving significant activity on the Solana and Blast blockchains. However, users should approach the platform with caution due to inherent risks like price manipulation and token volatility. Thorough research and careful investment are essential when engaging with this innovative but unpredictable market.