Over 99% of Pump.fun Traders Miss the $10K Mark

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Adam Tehc, an on-chain analytics specialist, noted that if you’ve earned $10,000 from trading Pump.fun’s tokens, you are among the top 0.412% of wealthiest wallets.

Profits from trading tokens are determined when these tokens are sold, either confirming profits or losses. Out of the 13.55 million Pump.fun wallets, a mere 55,296 have recorded gains over $10,000.

As a researcher, I’ve uncovered some striking findings in my analysis: It appears that the landscape for six-figure earners is more dismal than initially thought. A minuscule 0.048% of these wallets have managed to accrue profits surpassing $100,000. The truly affluent, those boasting profits over $1 million—a mere 0.00217%—represent a scant 293 wallets.

Profits Misjudged — Pump.fun Founder Challenges Dune Data

According to Alon, the founder of Pump.fun, the reported figures might not be accurate because they don’t include certain high-revenue transactions that could potentially skew the overall view. He explained that the profits and losses do not factor in coin purchases made after connecting with Raydium, which means the actual number of profitable wallets could exceed the given estimates.

“There are many issues with this analysis. FIRST and foremost, buying coins after they have already bonded to Raydium is NOT included when calculating your pnl,” Alon explained. 

As a researcher, I find that unrealized profits, or profits from assets not yet sold, are not factored into my calculations, adding an intriguing layer of complexity to my analysis. These profitable wallets, typically owned by early investors who demonstrated strong conviction in their asset choices, are a common sight among the market landscape. The allure of potential higher returns often keeps many traders holding onto their positions, patiently waiting for the perfect moment to cash out.

I myself, as a crypto investor, have learned a valuable lesson from Alon’s example about holding onto PNUT tokens. Even though these tokens significantly increased in value during their initial phase, if I had initially purchased them for $40,000 and am still holding on to them, the profit-to-loss ratio would unfortunately show a loss.

“If you bought Fartcoin at $200k and sold today (a return of over 4,000x), your pnl would be $0,” said Alon.

On Pump.fun, an additional level of intricacy comes from the behavior of wallets on the platform. Approximately 30% of the wallets have conducted just one transaction, usually a sale. These wallets seem to be operated by bots or AI agents, making it harder to distinguish genuine user activity and profitability.

Pump.fun Still Dominates Solana

Pump.fun has played a significant role in the Solana ecosystem by launching a user-friendly token platform that streamlines memecoin creation and trading. While there have been issues with misuse of its initial live-stream feature, it has also lowered entry hurdles, attracting wider participation. Data shows a noticeable gap between typical traders and high-performing users on the platform.

In spite of hurdles within the memecoin sector, Pump.fun has managed to hold a robust stance within the Solana network, raking in almost $400 million in income. As reported by blockchain analytics platform Lookonchain on January 2nd, the platform amassed around 2,016,391 SOL tokens, translating to an earnings total of approximately $398 million.

In the past few days, Pump.fun has transferred approximately $300 million worth of SOL tokens to Kraken and exchanged around $41 million into USD Coins (USDC). This platform is a significant player in token generation on the Solana blockchain, accounting for more than 70% of all tokens created on one Saturday and 69.5% the following day. Its user-friendly process allows for token creation within minutes without requiring any technical expertise, reinforcing its prominent position within the Solana ecosystem.

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2025-01-12 13:56