Pump.fun In-Depth Breakdown: A Complete Guide to Creating Profitable Tokens from Scratch

Pump.fun is a decentralized token issuance platform built on the Solana blockchain. Users can create, issue, and trade various tokens, especially creative tokens driven by social hype. The platform has quickly gained popularity due to its extremely low entry barrier, enabling both beginners and experienced traders to participate in the token economy. Since launching in January 2024, Pump.fun has accumulated over 3.85 million listed projects, with a total platform revenue exceeding 1.48 million SOL tokens (approximately $355 million USD), and an average daily fee income of over $3 million USD, making it one of the most lucrative platforms in the DeFi ecosystem.

What exactly is Pump.fun?

The core value of Pump.fun lies in the democratization of the token creation process. Previously, creating a token required programming knowledge, but Pump.fun simplifies this to basic steps such as filling in the name, symbol, and uploading an image. The platform adopts a joint curve pricing model—an automatic price adjustment mechanism where the more tokens are bought, the higher the price; the more tokens are sold, the lower the price, effectively preventing manipulation common under traditional fixed liquidity models.

Since its launch in January, Pump.fun has quickly become a hot topic on social media. In April, the platform expanded to Ethereum’s layer 2 solution, Base network, further increasing its user base. Industry insiders view it as one of the most innovative Web3 applications today, owing to its simple operation, low startup costs, and anti-fraud mechanisms, attracting a wide range of users from complete novices to seasoned traders.

The joint curve: the core engine of Pump.fun

The joint curve mechanism used by Pump.fun is the technical foundation of the entire platform. When users create a new token, 8 million tokens are locked into this curve. As purchase volume increases, the token price rises exponentially. This means early investors can buy at lower prices, incentivizing participation.

When the market cap of a token reaches $69,000 USD, the platform automatically provides $12,000 USD of initial liquidity on Raydium (the largest DEX in the Solana ecosystem) and destroys the corresponding LP tokens. This mechanism ensures market stability and prevents the platform from maintaining long-term control over the token.

Subsequently, highly popular tokens will gradually list on other DEXes or even enter centralized exchanges, achieving full liquidity.

The “wealth creation myths” on Pump.fun

Peanut the Squirrel (PNUT): From 0 to $1.8 billion

PNUT became a top case on Pump.fun due to its unique IP theme and community cohesion. This token, featuring a squirrel mascot, integrated game mechanics and NFT collectibles to build a complete user ecosystem. Its peak market cap once reached $1.8 billion.

As of the latest data, PNUT’s circulating market cap is $70.75 million, with a 24-hour trading volume of $575,000 and a price change of -1.65%. Success factors include sustained social media promotion, endorsements from KOLs, and the token’s entertainment value. PNUT exemplifies a phenomenon: if a token offers real utility and community interaction, it can maintain popularity even in a bear market.

Goatseus Maximus (GOAT): AI-driven innovation

GOAT represents the combination of AI technology and cultural symbols. This “Greatest of All Time” themed token incorporates AI-generated content, cross-chain compatibility, and gamified reward systems. Its market cap once exceeded $1.3 billion, with a growth of 620% since launch.

Current data shows GOAT’s circulating market cap at $31.98 million, with a annual dip of -93.36%. This reflects market cooling on AI-themed tokens but also indicates that even after significant retracements, GOAT still maintains considerable market attention. Many investors now jokingly refer to their initial decisions with “was i making money meme.”

Just a Chill Guy (CHILLGUY): The power of TikTok

CHILLGUY exemplifies social dissemination. By launching the #CHILLGUYChallenge on TikTok, this relaxed and friendly brand gained millions of exposures within weeks. Its peak market cap exceeded $543 million.

Latest figures show CHILLGUY’s circulating market cap at $16.39 million, with significant daily volatility. This case illustrates that the lifecycle of platform tokens often follows social hype—rapid growth during hype peaks and quick falloff during decline.

Five steps to quickly launch your token

Step 1: Connect Wallet

Visit Pump.fun official site, connect with Solana-compatible wallets like Phantom or Solflare. Ensure sufficient SOL balance—at least 0.1 SOL recommended—for paying fees.

Step 2: Fill in token information

Click “Start a new coin,” enter token name, symbol, project description, upload logo image. Pay about 0.02 SOL (roughly $1.5 USD) for deployment.

Step 3: Token goes live instantly

Once created, the token immediately goes live on the platform and can be traded. No need to wait for approval or liquidity activation.

Step 4: Conduct trading

Buy promising tokens or sell holdings through the joint curve mechanism. The platform calculates prices in real-time to ensure fair trades.

Step 5: Witness liquidity migration

When market cap exceeds $69,000 USD, the platform automatically adds liquidity on Raydium, enhancing trading depth and reducing risks.

Why is Pump.fun so popular?

1. Extremely simple operation

No coding or technical skills needed; the fill-in-the-blank creation process makes anyone capable of issuing tokens. This breaks the technical barriers of crypto entrepreneurship.

2. Realistic profit possibilities

Stories of tokens rising from hundreds of dollars to millions are common. Although success isn’t guaranteed, the mere potential attracts participants. The low startup cost of 0.02 SOL makes trial-and-error feasible.

3. Instant trading

Create and trade immediately—no cold start or waiting period. Liquidity exists from the first transaction, a revolutionary contrast to traditional exchanges’ lengthy onboarding.

4. Fair launch mechanism

Pre-sales and team reservations are prohibited; all tokens start from the joint curve’s origin. This design theoretically eliminates insider trading possibilities.

5. Strong community effect

Deep integration with social media enables any interesting idea to grow in value through dissemination, fostering a highly engaged user community.

Risks you must know

High volatility risk

Token prices can double within hours or drop 90% instantly. This is more gambling than investing.

Liquidity trap

Many tokens never reach the $69,000 USD liquidity migration threshold, resulting in insufficient trading depth and difficulty entering/exiting.

Fraud risk

Although pre-sales are prohibited, creators can still manipulate price via large buys to pump and dump. In fact, a platform vulnerability exploited in May 2024 via flash loans led to an $2 million arbitrage attack.

Regulatory uncertainty

Mixing NSFW content with investment activities may violate regulations. In November 2024, the platform temporarily suspended live streaming due to content review issues, indicating regulatory risks.

Psychological dependence

The rise of “was i making money meme” culture reflects many participants’ self-mockery or depression after losses. The gamification design may reinforce addictive tendencies.

How solid are Pump.fun’s security mechanisms?

Fair launch guarantees

Prohibiting pre-sales reduces insider risks but cannot eliminate them entirely. The joint curve design ensures prices won’t fluctuate wildly due to large single orders, which is effective.

Closed-source code as a double-edged sword

Pump.fun uses closed-source code and private APIs. This can help prevent external hacking but also means no independent third-party security audits. Platform vulnerabilities might persist undetected.

Liquidity destruction mechanism

Destroying LP tokens when market cap hits $69,000 USD increases token stability but effectively acts as a platform endorsement of the token’s value—any issues later could quickly erode user confidence.

What does the market think about Pump.fun’s future?

Analysts expect Pump.fun to continue expanding onto more L2 networks (such as Arbitrum, Optimism) to attract more users. The platform is also seeking to improve community participation, possibly through more mining, airdrops, and incentives.

However, it faces serious challenges. Multiple security incidents have shaken user trust, requiring more aggressive security audits, stricter content moderation, and transparent risk disclosures. Competitors are launching innovative features like cross-chain tokens and NFT+FT integrations, which threaten Pump.fun’s market position.

Regulatory attitudes are becoming more cautious globally, with potential new restrictions on token issuance. Pump.fun needs to balance innovation with compliance.

Final advice

Pump.fun has indeed opened a door for the masses to enter crypto entrepreneurship, but that door comes with both opportunities and traps. Participants should understand:

• Creating tokens is easy, but achieving real value is extremely difficult
• Early investors’ gains often rely on later investors’ losses
• Any promise of stable returns is a scam

If you choose to participate, be mentally prepared to lose all your capital and only invest what you can afford. True investors research the actual utility and community quality of tokens, not blindly follow trends.

Further Reading

• Top high-potential tokens in the Solana ecosystem
• Investment guide for AI-driven tokens
• Complete review of Solana DEX ecosystem
• Risk management strategies for token trading