The Fall of the Solana Titan Project: The End of Liquidity Behind the $4 Billion Financing of Pump.fun

Author: White55, Mars Finance

01 Spotlight Fading: A Valuation Gap in a $1.3 Billion Public Offering

In July 2025, Pump.fun, the most dazzling Meme coin launch platform in the Solana ecosystem, initiated its token public offering with a valuation of 4 billion USD, selling 33% of its tokens to retail and institutional investors, raising as much as 1.32 billion USD.

Previously, Marsbit conducted an analysis of Pumpfun's valuation and recommended everyone to read it:

In-depth Analysis of Pumpfun: The Untold Story and Valuation Analysis Behind the Meme Coin Casino

As the market is still digesting this astronomical figure, the sharp analysis by Jocy, founding partner of IOSG, has torn apart the facade of prosperity: "At its core, this is the team seeking to exit liquidity, and the project's fundamentals and market environment cannot support the inflated valuation at all." Behind this assertion lies a set of shocking data curves:

Income has collapsed sharply: from a peak of 7 million USD in a single day in January 2025 to just 500,000 USD now, a drop of over 92%, like a burst bubble.

Market share collapse: Competitor LetsBonk has surged to the top with a 51% market share, while Pump.fun has slipped to 39.9%, making the change of throne a reality.

Recommended reading: Pumpfun is dead, LetsBONK is rising, why has the throne of the Solana Meme launch platform changed hands?

Ecological value evaporation: The once prosperous "graduation project" (mature tokens migrated to DEXs like Raydium) has seen its market value plummet from tens of millions of dollars to a freezing point range of 50,000 to 100,000 dollars.

Even more suffocating is the risk exposure of the token economics design. The team and early investors will hold nearly $2 billion in cash reserves through this ICO and historical accumulated transaction fee income.

But the public investors are faced with three layers of fog:

The governance structure is opaque, and the decision-making process is unknown to anyone.

The team's token release terms for investors are not transparent, posing a significant risk of immediate sell-off upon listing.

and raised funds with a valuation of $4 billion, severely overdrawn future growth potential for the next few years.

Jocy pointed out bluntly: "The team has neither the willingness nor the ability to 'pump' or 'control' the market; this ICO is more like the final 'value realization' (Exit Liquidity)."

02 Token Economics Traps: Why is the $4 billion valuation on shaky ground?

According to official disclosed information, the total supply of PUMP tokens is 1 trillion, with 33% allocated for ICO sales, 24% reserved for community and ecosystem programs, 20% distributed to the team, 13% to existing investors, and the remaining allocated to the ecosystem fund and foundation.

The $4 billion valuation of Pump.fun is like a skyscraper lacking a foundation, creaking in the cold winds of the cryptocurrency market. Compared to traditional financial markets and crypto blue-chip projects, the fragility of its valuation logic is glaringly exposed:

Financial multiple distortion: Based on a 30-day annualized income of $77.98 million, its fully diluted valuation (FDV) to income ratio reaches as high as 64 times, far exceeding DeFi pillar projects like Uniswap (about 10 times) and MakerDAO (about 8 times). Even when compared to social media, which is also a representative of the attention economy, it is significantly higher than mature companies like Meta (about 7 times);

Technical moat is missing: the platform's core function—rapid token issuance and trading based on Bonding Curve—has a very low technical threshold and is highly replicable. Competing products like LetsBonk have already emerged in the market, with the latter quickly capturing more than half of the market share with a more aggressive strategy.

Ecological parasitic risks: Highly reliant on the performance dividends of the Solana ecosystem, once the underlying network is congested, costs rise, or it faces regulatory crackdowns, the platform's business will suffer a devastating impact.

The token distribution plan further exacerbates the risks. According to the disclosure, the tokens allocated to private investors (18%) and public investors (15%) will be fully unlocked on the first day of listing, while the lock-up terms for the team (20%) and existing investors (13%) remain undisclosed.

This design almost creates perfect arbitrage conditions for insiders: using public funds to support the market and selling chips at high liquidity points.

Ironically, the team holds a cash reserve of 2 billion dollars but has not established any buyback or treasury appreciation mechanisms to support the token's value, allowing the secondary market to be exposed to selling pressure.

03 The Sword of Damocles of Regulation: The Original Sin of Platforms in Legal Disputes

The business cornerstone of Pump.fun is facing a severe questioning from the legal system.

Since the beginning of 2025, the Southern District Court of New York has accepted two class action lawsuits, accusing the platform of acting as a "joint issuer" in violation of securities law by promoting the sale of unregistered securities. The core of the lawsuit directly points to the essence of its operations:

Securities Attribute Dispute: The plaintiff cites the Howey Test, arguing that the platform uses automated tools to mass-produce tokens and implements centralized control over token creation, pricing, and liquidity maintenance, making it fit the definition of an "investment contract";

Regulatory Compliance Vacuum: The platform lacks basic compliance measures such as KYC (Know Your Customer) verification and investor suitability assessments, and has even been accused of promoting tokens to minors.

Global Regulatory Crackdown: Apart from the United States, the UK's Financial Conduct Authority (FCA) has issued a warning to Pump.fun, forcing it to block access for UK users. Regulatory agencies in multiple countries are closely monitoring the compliance risks of Meme coin platforms.

These lawsuits could become landmark cases for the cryptocurrency industry.

For Pump.fun, which relies on the "permissionless token issuance" business model, compliance costs will erode its profit base and even trigger a survival crisis. Under regulatory pressure, the vulnerability of its token economy is further amplified.

04 The Twilight of Attention Economy: Meme Fatigue and Capital Migration

Pumpfun's weekly trading volume is gradually declining.

The decline of Pump.fun is not only a predicament for the platform itself but also a reflection of the structural weakness of the entire Meme coin market. On-chain data reveals the harsh truth:

User profit and loss are extremely polarized: Dune Analytics shows that among the 594,000 active wallets on the platform in May, only 3.6% of users made over $500 in profit, while loss-making users reached as high as 52.5%. Only 27 "winners" made over $100,000, accounting for 0.0045%, starkly revealing the casino nature of "a few harvesting the majority."

Liquidity continues to dwindle: The trading volume of meme coins on the Solana chain has shrunk from its peak of $3.3 billion at the end of 2024 to the $1 billion level, with user activity and daily token creation both halved.

Capital aversion to risk: After the announcement of the Pump.fun public offering, mainstream Meme coins in the Solana ecosystem collectively plummeted, with on-chain net capital outflows jumping to third place across the network, as the market views it as a "liquidity black hole."

Investor behavior patterns are also undergoing profound changes. With platforms like LetsBonk emerging with lower fees and more precise community operation strategies, capital is rapidly withdrawing from the extensive model of "indiscriminate token issuance" and shifting towards Meme projects that have cultural recognition or practical scenarios.

Traditional crypto capital has begun to withdraw from the Meme track, shifting towards the Infra fields such as Restaking, parallel EVM, and AI agents, which possess technological narratives and stable cash flows. The market's illusion of getting rich overnight is collapsing, and the pursuit of sustainable value is gradually returning to the mainstream.

05 Transformation for Survival: The Unfinished Journey of Swap's Ambition and Ecological Reconstruction

In the face of the crisis, Pump.fun is not sitting idle. The team recently disclosed two strategic adjustments: expanding to a scale of 70 people, covering professional fields such as engineering, compliance, and legal; testing its own AMM (Automated Market Maker) system, attempting to build a trading closed loop. These measures directly address core pain points:

Reduce external dependency: By utilizing the built-in Swap function, migrate token trading from Raydium to the proprietary platform to prevent outflow of liquidity and fee income (previously, Raydium plummeted 30% in a single day due to this news);

Expand sources of income: AMM can capture trading fees, alleviating the income pressure brought by the decline in the number of issued tokens, theoretically introducing cash flow support for the tokens.

Compliance Layout: The formation of a professional team suggests its intention to respond to the global regulatory framework, particularly in light of potential enforcement actions by the SEC.

However, the road to transformation is fraught with difficulties.

The launch of AMM directly challenges the Solana ecosystem DEX giant Raydium, triggering fierce competition and even a liquidity war.

The more fundamental contradiction lies in the inherent conflict between the "short and quick" gene of meme culture and complex financial infrastructure.

When Pump.fun tries to integrate functions such as Swap, staking, and cross-chain, it may lose the core advantage of "fast token issuance" due to product bloat.

It can be seen that after the launch of the new features, there has not been a significant increase in platform revenue or user retention, and this $1 billion financing may sink into a doomed ecological experiment.

Aftershock: A Value Alarm in the Maze of Crypto Innovation

The $4 billion valuation farce of Pump.fun exposes the deepest value misalignment in the crypto market—when the valuation of speculative tools crushes fundamental infrastructure innovations (such as Ethereum Restaking and modular blockchains), the foundation of the industry is already shaken.

The assertion of "withdrawing liquidity" is by no means alarmist, but rather a precise puncturing of the bubble.

Retail investors who still want to participate in this dangerous game must strictly adhere to two iron rules: treat the invested funds as risk capital that can be lost entirely, and never bet their life savings; wait a week after the token goes live to observe the real price level after the initial liquidity has exhausted before taking action.

The real crypto revolution is never born out of valuation bubbles, but in the protocols that silently build a decentralized future. When the tide goes out, Pump.fun may be forgotten, but the alarm it rings should resonate in the hearts of every investor.