The memecoin boom on Pump.fun is losing steam

The term “graduation rate” refers to the percentage of tokens that make it through Pump.fun’s incubation phase and become fully tradable

Memecoin enthusiasm on Pump.fun, a platform facilitating token creation and trading on Solana, appears to be waning, according to data from Dune Analytics.

The platform's "graduation rate," referring to the percentage of tokens completing incubation and becoming fully tradable on Solana decentralized exchanges (DEXs), remained below 1% for a fourth consecutive week. Tokens must meet sufficient liquidity and trading volumes to qualify for graduation.

While Pump.fun has never boasted a high success rate—its best week in November 2024 saw 1.67% of memecoins graduate—the platform's launch activity at the time was significant. A record-breaking 323,000 tokens were created in a single week, ultimately sending around 5,400 new tokens into Solana's DeFi market.

However, with lower token creation volume—averaging 100,000 tokens weekly—and a decline in new token launches, Pump.fun's weekly graduations dropped to an average of 1,500 over the past month.

The platform's total volume also decreased significantly from $119 billion to $44 billion, with only $2.1 billion in trades over the past four days.

At its peak in January, nearly 1,200 tokens were launching daily on Pump.fun. But with slowing token activity, that number had fallen below 300 per day by early March.

Trading volume for graduated Pump.fun tokens also plunged 94% from January highs of $3 billion to about $170 million. The platform's token graduation rate, which tracks new coins reaching $100,000 in market cap to move to Raydium, had slowed, dropping from 1.85% to 0.83% weekly.

Despite the downturn, February's trading volume remains the fourth-highest month for Pump.fun since its launch in January 2024.

Pump.fun co-founder Alon Cohen attributed the slowdown to broader market conditions, adding that when the market dips, altcoins and memecoins follow suit.

"We are seeing a slight decrease in volume, but Pump.fun's share of revenue in the on-chain ecosystem has remained stable," Cohen said. "Over the last 30 days, we've pulled in $74 million in revenue."

The downturn also hints at trader fatigue within Solana's memecoin ecosystem. Months of hype have been followed by growing distrust, driven by rug pulls, influencer-driven schemes, and insider trading groups. Speculative surges, like those seen with presidential, influencer, and AI-themed tokens, often fizzle out as the risks become clearer.

One notable instance was the "Libragate" scam, which saw a token backed by a group including Hayden Davis surge after receiving Argentine President Javier Milei's endorsement. However, it culminated in a $107 million rug pull, with 86% of investors losing at least $1,000.

Looking ahead, Pump.fun isn't standing still. It recently launched a mobile app and teased a native automated market maker.

The slump highlights falling demand for memecoins, which are often viewed as avenues for short-term speculation rather than long-term investment. Even political figures, such as Donald Trump, launched their own tokens, but enthusiasm has waned. Trump's memecoin has dropped 84% from its January peak, according to CoinGecko.

Regulators are also taking notice. In a statement, the SEC clarified that memecoins aren't securities, but it will continue to pursue any instances of fraud and market manipulation.