Pump.fun continues to buy back its PUMP tokens, still directing most of the commissions towards reducing the supply of its own token.
To date, the team has invested 205 million dollars in the buyback of shares, which accounts for over 99% of daily commissions. In total, the team has repurchased 13.86% of the offering, which helped PUMP bounce back from the lows.
The Pump.fun approach surpasses all other Solana projects, which mainly retain their fees. Pump.fun announced a buyback after several months of criticism for fees outside the Solana ecosystem. It is estimated that Pump.fun has earned about 1 billion dollars in fees since its inception, mainly due to last year's peak altcoin season.
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Do buybacks under the PUMP program lead to an increase in company value?
Despite regular buybacks, PUMP tokens still hover near their lower limit. Buybacks almost completely offset all fees related to the generation and trading of meme tokens, but some are skeptical about whether their value returns to the community.
PUMP still trades at a price of $0.0027, down 54.7% over the past three months. Additionally, Pump.fun charges somewhat lower fees and cannot buy enough PUMP to influence the market. The community criticizes Pump.fun for improper use of SOL reserves, claiming the company sold them for PUMP instead of staking. Even considering the buyback, many PUMP holders are at a loss and do not receive any additional benefits or profit distribution.
Open interest in PUMP is also close to a historical low at $183 million, with about 60% of positions in long positions. On Hyperliquid, about 51% of traders are in long positions, indicating increased attempts to bet on another drop in PUMP's price.
Moreover, the token has mainly crashed to liquidate long positions, and no 'short squeeze' has been observed. Only 10 major investors in Hyperliquid opened positions with this token.
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PUMP reflects a slowdown in meme mining activity.
After the decline in daily fees for generating new tokens, Pump.fun switched to decentralized trading. The decentralized exchange compensates for this decline but still cannot reach peak revenues during the 'meme season.'
Pump.fun and its decentralized exchange PumpSwap still generate 2.7 million dollars in daily fees and rank among the top five applications with the highest fee levels. Daily fees maintain a high baseline, although Pump.fun has slowed down token production and issuance.
On Solana, the trading of meme tokens has also changed, and they now account for only 5% of volumes. Decentralized exchanges (DEX) have shifted to trading wrapped assets, stablecoins, and outdated memes. Recently launched memes and old tokens account for about 5% of Solana DEX trading volumes, down from over 80% during peak periods.
