In summary
- Pump.fun dominated the Solana ecosystem, accounting for 62.3% of DEX transactions in November.
- The platform faced controversies for disturbing broadcasts and questionable activities.
- Its possible closure has raised concerns about the negative impact on the Solana network.
Tokens created on Pump.fun have accounted for 62.3% of all decentralized exchange (DEX) transactions on Solana so far in November, according to data from Dune. As for volume, the value of what has changed hands, this is slightly less pronounced at 42.3%.
The data reinforces arguments that the protocol has become a cornerstone in the Solana ecosystem.
Pump.fun debuted in January of this year, allowing anyone to launch a token. It originally only cost a few dollars to make, but the team eventually made it completely free. In turn, it has become one of the most culturally significant Cryptocurrency projects, giving rise to some of the biggest memecoins of the year, such as PNUT, GOAT, and CHILLGUY.
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However, the platform has also come under immense pressure following the appearance of a number of controversial, morally questionable and illegal tokens on the platform. It all started when an apparent mother shook her breasts in a live broadcast to promote her son’s memecoin. Although that was strange, the platform took a disturbing turn when another meme cryptocurrency developer caught fire to boost his token.
After that, Pump.fun decided to add live streaming as a native feature. Previously, users had been streaming on third-party sites, such as Kick. At first it was painfully flawed and the degens ignored it. But last week, he was the goal again. Some users joined the platform to perform antics for money, such as sitting on a toilet for days.
Several disturbing livestreams appeared on the platform disturbing viewers. Decrypt has seen screenshots and videos of Pump.fun livestreams featuring threats to animal life, the actual decapitation of a chicken, bestiality, and an apparent suicide—although the latter case is rumored to be false.
This caused outrage in the industry, and calls began to emerge for the platform to shut down the livestreaming feature.
The on-chain researcher known as WazzCrypto predicted that the US Department of Justice would shut down the site. And Preston Byrne, a cryptocurrency lawyer, claimed that the project is likely breaking the law.
“Pump.fun does a lot of things wrong from a social media legal perspective,” Byrne, UK Head of Legal at Arkham Intelligence and Managing Partner at Byrne & Storm, posted on Twitter. “No terms of service, no DMCA registration, and copyright policy, no privacy policy.”
He believes this puts Pump.fun’s future in a precarious legal position, especially in the UK where the company is based. As such, he agrees that shutting down the stream until he has resolved his legal matters is the right decision, which Byrne told Decrypt would only take 10 hours of legal work.
If the worst happens and Pump.fun is banned, this could have a ripple effect on Solana as a network. As mentioned, Pump.fun has accounted for 62.3% of transactions in November to date, but it has been a similar case for a few months.
In September and October, Pump.fun accounted for 60% and in August it accounted for 57% of all DEX transactions on Solana. This doesn’t even include the number of transactions that occur before a token migrates to decentralized exchanges once the token reaches a market cap of $69,000. According to Dune, only 1.2% of the nearly 50,000 tokens released in the last 24 hours have achieved this.
For this reason, some have begun to fear the worst for Solana by becoming too reliant on the degen nature of Pump.fun. “An economy built on this will not make it,” the Leader of the TrueMarkets news protocol on Ethereum, known as Millie, posted on Twitter.
Edited by Stacy Elliott.
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