Pump.fun, which started as a Solana-based meme coin launchpad, is writing a new chapter in blockchain application history. It's remarkable that it took just 217 days to achieve $100M in protocol revenue, creating unprecedented profits without having a native token representing the app.
However, people began to exploit Pump.fun, whose core purpose is to tokenize attention and entertainment, and their actions are increasingly crossing ethical boundaries. As a result, some members of the blockchain industry have called for regulations on Pump.fun. In response to this public sentiment, Pump.fun announced the discontinuation of its live streaming feature, which was considered the root cause of such exploitation.
While the events occurring on Pump.fun are morally and ethically inappropriate, and some are even illegal, we need to consider whether stopping and regulating them is truly the right approach. Tools themselves are always purpose-neutral; only the actors using these tools have intentions. Is regulating Pump.fun really the best choice? There are quite a few aspects we need to think about regarding this matter.
The 2024 crypto market was so dominated by meme coins that it could be summarized in that single word, with extraordinary interest and demand in this sector. Starting with Dogecoin (Doge), meme coins have evolved beyond just dog-themed tokens to include various animals, specific events, famous celebrities, and memes related to public figures, all of which are being actively traded as tokens. These tokens have attracted even more attention as some meme coins achieved market capitalizations of 10 million, 100 million, and even 1 billion.
At the center of this meme coin supercycle are Solana and Pump.fun, which has now become Solana's flagship application. Pump.fun is a meme coin launchpad that helped Solana become the protagonist of this meme coin supercycle. Its greatest advantage was that anyone could easily issue tokens through its extremely simple UI, enabling various meme coins to be created in real-time. Of course, several Solana-based DeFi applications that provided infrastructure for easy trading of meme coins launched on Pump.fun also benefited from this meme coin supercycle.
However, as the saying goes, "good fortune comes with its share of misfortunes" (好事多魔). Pump.fun, which started as a meme coin launchpad and became a massive hit, has now become a controversial topic in the blockchain industry as it demonstrates the extreme aspects of the attention economy. Today, I'll discuss Pump.fun's current status, various controversies surrounding it, and how these controversies connect to Crypto's Ethos.
$343M. This is the revenue generated by Pump.fun as of November 26, 2024, when this article is being written. Considering that Pump.fun is less than a year old, revenue approaching $343M is truly remarkable (it took about 217 days to achieve $100M in revenue). In terms of growth rate, Pump.fun's trajectory is unprecedented in the blockchain industry.
While various factors contributed to Pump.fun's success, in my opinion, the biggest factor is its accessibility even to those unfamiliar with crypto. In fact, Pump.fun has attracted many mainstream celebrities who weren't previously active in blockchain, generating buzz beyond the crypto industry. Notable examples include Caitlyn Jenner and Iggy Azalea, who issued their own tokens through Pump.fun.
Furthermore, as Solana's ecosystem grew in parallel with Pump.fun's development, various meme coins could be created and traded based on abundant liquidity and solid community support. This naturally led to continuously increasing demand for Pump.fun as a meme coin launchpad. Even more surprisingly, some tokens created through Pump.fun reached the symbolic milestone of $1 billion in market capitalization. Notable examples include $PNUT, representing the 2024 US presidential election, and $GOAT, symbolizing the convergence of AI and cryptocurrency. These success stories attracted even more people to Pump.fun.
Pump.fun has a particularly noteworthy feature: live streaming functionality, similar to Twitch, allowing users to promote specific tokens through real-time broadcasts. Since the ability to interact with token holders in real-time was highly innovative, Pump.fun's revenue consistently increased after introducing live streaming. However, this same live streaming feature is now at the center of Pump.fun's controversies. The combination of real-time video streaming capabilities and meme coins' inherent nature of being driven by public attention has led some users to exhibit outlandish behavior to generate profits.
Source: Tma_420
In just the past week alone, we've seen 1) a human pretending to be a dog during streams, 2) someone refusing to leave their bathroom until their token reached $25 million in value, 3) someone threatening to shoot their pet dog if their token's value didn't increase, and 4) a minor threatening to shoot their family with a shotgun if their token didn't reach their desired value.
With dozens of such outrageous acts being live-streamed daily, voices within the blockchain industry began calling for "government regulation." Eventually, Pump.fun, responding to this public sentiment, announced the discontinuation of their live streaming feature.
Observing these recent events has led me to reflect not just on blockchain and crypto, but more broadly on markets, human nature, and the value of freedom.
Advocates of Bitcoin and blockchain argue that these technologies make humans freer. Bitcoin holds great value as a neutral currency or commodity, and blockchain networks can become neutral networks if they are sufficiently decentralized. Early blockchain enthusiasts were drawn to these distributed systems precisely because they couldn't be stopped or interfered with by any single entity.
Of course, these same values have led some to view blockchain technology negatively. Most notably, Bill Gates denounced blockchain and crypto assets as "death technology," arguing that assets like Bitcoin, which provide some degree of anonymity, could be misused for crimes like drug trafficking, prostitution, and contract killing. Nevertheless, crypto assets, led by Bitcoin, are now heading toward mainstream adoption. Particularly with Trump's re-election in 2024, Bitcoin and crypto assets' status will likely rise further. How did blockchain and crypto, once denounced by Gates as death technology, become part of mainstream discussion? Simply put, its benefits were judged to outweigh its drawbacks.
All technology has two sides. Moreover, all 'tools' have two sides. This is because humans are the ones wielding these tools. According to the great German existentialist philosopher Martin Heidegger, a tool's meaning is determined by human purpose and context. For example, a knife only has meaning when it exists for humans to cut or slice something.
Bitcoin is one such 'tool.' The argument that Bitcoin and crypto assets 'can be used for bad purposes' is similar to how a knife can be used for cooking but also to harm others. Should we ban a tool because it can be used for harmful actions? If so, we must also give up the efficiency and convenience it brings. In this context, I believe Bitcoin is moving toward mainstream adoption because its benefits outweigh its drawbacks.
What about Pump.fun? The same logic applies. The numerous outrageous acts occurring on Pump.fun aren't created by the platform itself but by the people using it. Arguing that Pump.fun should be 'banned' because of these incidents is equivalent to arguing that Bitcoin should be 'banned' because it's used for drug deals and prostitution.
Furthermore, even if governments or institutions try to 'ban' blockchain or blockchain-based applications, would that actually stop their use? As long as blockchain functions properly, it's nearly impossible for any single entity to completely ban blockchain or applications built on it.
What disappoints me is that those in crypto who criticized Gates's logic as "stupid" are now using the same logic to advocate for banning or regulating Pump.fun. I want to ask them: Would they willingly accept regulation of Bitcoin based on the same logic? And do they really think regulating Pump.fun will eliminate attention-seeking behavior? (Monetizing attention isn't unique to Pump.fun - YouTube, Twitch, and others have done it too.)
My answer to both questions is no. I mean, what do you really want?
The most attractive aspect of blockchain and crypto is its neutrality. Being colorless and odorless, the color and shape of the tool changes depending on who uses it. When Satoshi first created Bitcoin, he didn't think about Runes or Ordinals, but just as others' 'intentions' led to such uses, an open system embraces the complexity of the collective (or community) and produces results that an individual could never have imagined or implemented alone.
Who knew Pump.fun would become this successful? Who could have predicted these bizarre incidents on Pump.fun? Who would have thought Solana would become the biggest beneficiary of the meme coin super cycle? This aspect of blockchain bears many similarities to free-market(Invisible hand or spontaneous order specifically). This is because when people interact in complex ways, the results can sometimes be destructive, but can also provide new paradigm and ideas.
Blockchain itself isn't bad. It has no malicious intent. The same goes for blockchain-based applications. If they appear harmful, the responsibility always lies with the people using them.
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