Rising Stars or Missed Opportunities? Analyzing Pump.fun Traders’ Profit Potential

A significant number of users on Pump.fun, a decentralized platform centered on Solana-based memecoins, have not attained profits surpassing $10,000, recent data indicates. Despite the platform’s widespread use, only a handful of traders have been able to derive pronounced benefits from its offerings.

Out of 13.55 million wallet addresses linked to Pump.fun, merely around 55,296 wallets have reported earnings exceeding $10,000, as per Dune Analytics. The information also reveals that larger profit margins are uncommon, with just 0.048% of traders achieving over $100,000 and a slightly smaller 0.00217% (293 wallets) surpassing $1 million in earnings.

The statistics reflect realized profits, computed when traders liquidate their positions by selling their assets. Analyst Adam Tehc emphasized the rarity of substantial gains, stating on Jan. 10, “Only 0.412% of wallets have recorded profits of $10,000 or higher on Pump.fun’s tokens.”

Pseudonymous analyst Alon pointed to constraints in the data, suggesting it may not fully capture profitable traders. For instance, profits from tokens acquired after bonding to the decentralized exchange Raydium are excluded. Alon speculated that the actual quantity of highly profitable wallets might be much larger, adding that unrealized profits—assets that are not yet disposed of—are neglected in the assessment. “Early investors with strong faith in their holdings frequently have considerable unrealized gains,” Alon remarked.

While individual profit levels differ, Pump.fun has generated remarkable revenue. By early January, the platform’s total income approached nearly $398 million, equivalent to 2,016,391 SOL tokens, according to Blockchain analytics firm Lookonchain. This achievement occurred despite a downturn in the overall market capitalization of memecoins in recent months.

The platform’s liquidity approach consists of depositing over $300 million worth of SOL tokens to Kraken and converting about $41 million into USD Coin (USDC). Once the initial liquidity is secured, memecoins developed on Pump.fun are predominantly traded on the Raydium exchange.

Pump.fun’s capacity to create significant revenue highlights its role in the unpredictable memecoin domain, even as queries regarding trader profitability and the breadth of analytics remain. The platform still attracts interest from traders and investors exploring the speculative realm of decentralized finance.