Pump.fun Sees Fees, Users, and Token Launches Drop After LIBRA Fallout

The Solana based token launchpad Pump.fun has hit a rough patch, and the numbers tell a compelling story. In just one week, the platform saw its fees plummet by a staggering 32%, dipping below the 15,000 SOL daily average for the first time since late December.

This sharp decline comes hot on the heels of the LIBRA token controversy, a drama that’s shaken the confidence of users and investors. From dwindling new user sign-ups to a noticeable drop in token launches, Pump.fun is grappling with a storm of challenges that’s raising eyebrows across crypto. So, what’s really going on? Let’s dive into the details and unpack this.

Data from a Dune Analytics dashboard paints a vivid picture of the downturn. Between February 7 and February 13, the number of new users joining Pump.fun fell by 16.4%, sliding from 719,524 to 601,516. That’s a significant dip, marking the first time since late November that the daily average of new users within a week has slipped below the 100,000 mark. Meanwhile, token launches on the platform took an even harder hit, dropping 26.3% from 344,607 to 253,955 in the same period.

Despite this setback, Pump.fun can still boast an impressive milestone, having deployed nearly 8 million tokens in just 13 months as of February 21. But the shine of that achievement is fading fast as fees, the lifeblood of the platform, follow suit. From February 7 to 13, fees totaled 124,623 SOL, only to tumble nearly 32% to 85,196 SOL the next week. It’s a jarring slide that underscores the fallout from the LIBRA incident.

The LIBRA Controversy and Its Ripple Effects

The root of Pump.fun’s woes seems to trace back to the wild ride of the LIBRA memecoin. On February 14, Argentina’s President Javier Milei threw his weight behind LIBRA, touting it as a potential funding avenue for Argentinian ventures. The endorsement sent the token’s price skyrocketing to a jaw-dropping $4.5 billion market cap. But the euphoria was short-lived, as Milei rescinded his support. Over the following weekend, LIBRA crashed a brutal 95%, leaving investors reeling. Yet, amid the chaos, a Nansen report revealed that two savvy wallets raked in over $10 million in profits by snapping up the token mere seconds after Milei’s X post and offloading it at the peak price of $4.55. This eyebrow-raising move sparked heated discussions about insider trading.

The LIBRA debacle didn’t just tank one token, it sent chills through the entire memecoin market on Solana. Investors, spooked by the volatility and ethical questions, began pulling back. According to Artemis data, the memecoin sector has slumped 13.4% since February 14, marking it as the third-largest drawdown among altcoin sectors during this period.

For Pump.fun, a platform that thrives on the memecoin frenzy, this cooling sentiment has been a gut punch. The decline in user engagement, token launches, and fees points to a broader unease that’s trickling down from the LIBRA fallout. Whether this is a temporary stumble or a sign of deeper cracks remains to be seen.