Has Pump's Bullet Hit the Bullseye, Is Solana's Story Over?

Original Title: "Did Pump's Bullet Hit Solana Right Between the Eyes?"

Original Source: ChainCatcher

Pump's Bullet Hit Right Between the Eyes

Just a moment ago, Alon, co-founder of Pump.fun, posted that Pump.fun's official X account was hacked and used to release a scam token called "PUMP," warning users to be cautious of the risk.

As the most active meme coin launch platform in the Solana ecosystem, Pump.fun once became a myth of retail investors' wealth creation with a dual-phase mechanism of "internal hatching + external eruption." The token first accumulated liquidity within the platform through the Bonding Curve mechanism. When the trading volume exceeded the $69,000 threshold, it automatically migrated to the leading DEX, Raydium, to establish a liquidity pool, completing the closed-loop from project initiation to market hype. This precisely designed rule set has been operating wildly since 2024:

From April 1 last year to today, tokens launched from Pump.fun contributed $346 billion in trading volume to Raydium, accounting for half of the DEX's total volume. Out of the total $197 million fees collected by the platform, an astonishing $104 million came from Pump.fun's trades.

However, when celebrities like Trump entered with "flash-like" tokens (such as TRUMP, MELANIA), the game of pass-the-parcel began to reveal its naked harvesting logic. On-chain data shows that over 70% of meme coins displayed a "peak upon pool creation" trend during the external phase, with an average survival time of less than 48 hours.

A more dangerous signal comes from the comprehensive retreat of liquidity. On February 24, among the tokens graduated from Pump.fun, only one had a market value barely exceeding a million dollars, and the on-chain speculative frenzy has almost frozen. Raydium's meme coin trading depth has shrunk by over 90% from its peak, and Solana's on-chain stablecoin market value has seen a net outflow of over $1 billion in the past 30 days, marking the largest fund outflow since the FTX crash.

This collapse is not incidental. When project teams, trading platforms, and celebrities form a "harvesting iron triangle," when the mathematical model of the Bonding Curve turns into a tool for liquidation, retail investor confidence has long been worn away in the repeated "sell-offs from the start" theatrics. The malfunction of Pump.fun is not only a microcosm of Solana's liquidity crisis but also a brutal interrogation of the entire crypto world's meme narrative—when the bubble deflates, the revelry ends, who will clean up this capital-devastated wasteland?

SOL Hits High and Plunges Over 50%, Ecosystem in Turmoil

As one of the most prominent public chain tokens of 2024, Solana rode the wave of Pump and meme to surge ahead, with a nearly 200% increase throughout the year.

However, since Trump's token release on Solana on January 18, this wave seems to have finally hit the shore: SOL's price first hit a historic high of $295 on January 19, then made a sharp turn downwards, with a decline of over 50% at one point.

With only 3 days left until Solana's largest-ever token unlock (worth $2 billion), there will be 11.2 million SOL unlocked for circulation, with most of them acquired from the FTX auction at a cost of $64 each, potentially creating significant selling pressure.

In addition to the poor token price performance, according to Defillama data, Solana's ecosystem TVL has dropped from its peak of $12.19 billion to today's $7.22 billion, and daily transaction fee revenue is also steadily decreasing.

Furthermore, the 24-hour net inflow data of the Solana ecosystem shows that $260 million flowed out in just two days on January 18 and 19, and the subsequent inflows have also been decreasing, far from the levels seen during the Pump period.

Moreover, a series of other indicators paint a bleak picture, with mainstream protocol tokens in the Solana ecosystem showing a downtrend over the past seven days:

Chart of Solana Ecosystem Performance on Rootdata

Overall, the ecosystem is presenting a scene of "the tree falling and the monkeys dispersing."

This inevitably begs the question: Has Solana's story come to an end?

Solana Labs Co-founder toly is also Afraid of a Crash!

Facing the risk of a token price collapse, the Solana ecosystem is going through its biggest fear, uncertainty, and doubt (FUD) since the FTX rug pull. Some analysts have estimated that, throughout the entire meme coin hype cycle, scammers have pocketed over $10 billion.

Facing the unavoidable reality, many community members have also responded.

As a co-founder of Solana Labs, toly has always advocated for benign technical development and innovation. He has also repeatedly called on builders to return to innovation and create high-quality projects. Although not directly attacking, his conversations with other community members in X have repeatedly revealed his dissatisfaction with Pump. Faced with questions from long-time supporters, he even made the response, "The assholes that mess with markets to max extract can go f』 themselves." And the group to which this refers is self-evident.

Crypto influencer @cobie has also repeatedly pointed out the issues with the PVP mode. He stated, "The current market's development context is that market participants actively rush into these scams like moths, and most people know these are scams, but the goal is to sell to the bagholders at triple the price. They just want to get rich quick in 2 weeks, not 2-4 years. Players hope to also win big in the next move."

Of course, the community is also making attempts at self-rescue. Solana introduced the SIMD-0228 proposal on February 26, setting a 50% target staking rate. If the staking rate exceeds 50%, the issuance will decrease, and the yield will decrease; if it is less than 50%, the issuance will increase, and the yield will increase. The minimum inflation rate is 0%, and the maximum inflation rate is based on the current issuance curve. The proposal aims to shift the SOL issuance to a market-driven model.

In addition, the Solana spot ETF has become another lifesaver—according to prediction platform Polymarket data, the market believes that the approval probability by 2025 is as high as 85.4%, and the probability of approval by June has also increased to 34%. If this comes true, following the cumulative billions in funds from Bitcoin ETF and Ethereum ETF, Solana may see a multi-billion-dollar injection of liquidity.

Solana's dilemma is by no means unique but a microcosm of the entire industry's "speculation biting back at innovation."

As summarized by influencer @0xNing0x: "We are now in the settlement moment of this cycle. The P young talents are the MVPs, Solana, Pump.fun, Jupiter are the best supports, TRUMP is the AFK player, AI16Z is the AFK player, JLP holders are the AFK players. On the losing side, SVP is the Base and Virtual, Ethereum, Arbitrum, Optimism, ZkSync, Starknet are the noob top, mid, jungle, and support."

Currently, Solana may only have two possible paths forward: either rely on external capital such as an ETF to forcibly extend its life, but potentially deepen its dependence on the financial casino path; or follow Toly's advocated "bitter medicine" approach, endure short-term pain, and rebuild developer confidence.

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