Pump.fun & Creator Capital Markets
Data Sources
What is CCM?
- Pumpfun is aiming to compete with Twitch and Kick on streaming.
- Existing or new streamers can launch a coin on pumpfun to kickstart their stream
Pump Revenue & Buybacks
- 30D Revenue - $56.06m
- 4th in 30D Revenue out of onchain protocols.
- All time Revenue - $807.8m
- Total $PUMP Purchases (Buybacks) - $98,888,429
- Today's purchase $3,056,038.58
- Total circulating supply offset by purchases - 6.622%
Alon introduced Project Ascend (promoting streamer coins) on September 2nd, which has supported a revenue increase catalysed by the buyback scheme introduced by Alon on July 15th (first buyback transaction). Indeed, despite starting on July 15th, the uptick in revenue only occurred on 5th August, when Pump memes such as Tokabu, USDUC etc. surged past Bonk launchpad dominance (sentiment began shifting around July 15th however, with revenue lagging).
Project Ascend Fee Structure
- Dynamic fee structure to reward creators 10x more than before.
- Coins in the 420-1470 SOL market cap range (100k-350k) earn the highest % creator fee.
- Fees then tail off by 0.05% for every proposed market cap interval (this is not a regular sequence).
- "On every trade the creator receives some portion of the total fees"
Kind fee case study
- Kind is a streamer that donates all fees to people in need (pretty trash narrative imo, everything charity related in crypto is disingenuous). Seems to be the main runner at the moment.
- Market cap $16.73m.
- Fees generated ~$200k
Current State of Streamer Coins / Issues
- Promising streamers get massive hype/price action pumps early on, before traders rotate. Main issue with 'trenches' is that traders are incentivized to hold for minimal time to protect risk.
- Calibre of streamers that have launched is generally poor - mainly crypto native people doing dumb stuff for attention. Some outliers include Kind and Bunnyfufu ex Cloud 9 LoL pro and professional streamer, $Runner - guy running on treadmill to lose weight, $FTP Feed the People (LA Homeless)
- I'm generally bearish on 'do X for higher mcap coins' like kind, runner and ftp. These seem like narratives that exhaust quickly and die. More bullish on actual streamers such as Bunnyfufu.
Pumpfun UI
- On Mobile app:
- Filter live-streaming tokens via the live tab
- Live tokens also show a "live" overlay in other tabs
- Past clips are saved right on the token page for easy reference too
Pump vs Twitch
- Twitch Monetization: Creators earn via subscriptions ($4.99 - $24.99/month) and ads (avg. $3.50 CPM), with Twitch typically taking a 50% revenue share.
- Twitch Earnings Tiers: This model results in small streamers making a few hundred dollars a month, mid-sized streamers earning 5k-30K, and top-tier streamers needing over 10,000 concurrent viewers to potentially reach six-figure monthly incomes.
- Pump.fun's Alternative Model: Instead of ads and subs, creators earn from trading fees on their own tokens. The fee rate starts high for new tokens (~0.95%) and decreases as the token's market cap grows.
- High Earning Potential on Pump: The platform saw 9,000 creators claim $2.8 million in fees in a single day, an average of about $300 per person. This could equate to $9,000 a month if sustained.
- Empowering Small Creators: Pump.fun allows creators with much smaller communities to achieve earnings that are typically reserved for the top 1% of creators on Twitch.
- Incentive Structure: Early-stage creators on Pump can keep as much as 80% of the fees, a stark contrast to Twitch's fixed revenue splits.
- Disruptive Potential: The model could fundamentally reshape the streaming economy by attracting creators not just from Twitch, but also from platforms like TikTok and YouTube.
- Sustainability Questions: The long-term success of Pump.fun depends on creators reinvesting their earnings and the platform's ability to attract a larger audience for content consumption rather than just financial speculation.
Criticisms
Incentives are skewed towards money-hungry people who don't stream for the love of the game. (see trading_axe, lucacseth)
Evaluation
Seems quite nascent at best but I think there's massive potential and Pump revenues are strong. Speculation is at an all time high and Pump is capturing sustained revenue off this trend alone. Right now, incentives seem too skewed towards attention-fleeting ideas such as 'Do X for Y mcap'. Pumpfun is betting that more web2 streamers port over and that a pumpfun native streamer is born. To what extent does anyone actually watch streams on pump rather than 'searching for the next 100x streamer' ad infinitum?
Follow on's:
- What has BONK.fun done in response to pumps success? Is there a leader <> laggard trade there?
- More broadly, what are the second order effects of this activity? Reason about and trade ideas downstream of these effects.
- Reason about the legal implications of creator coins
- What is the UI/UX experience of pump streaming like?
Bonk.fun Response
- Pumpfun has cannibalised Bonk's temporary market dominance.
- Bonk revenue has also been destroyed.
!Pump.fun vs Bonk.fun revenue over the last 24 hours — $1.6m against $26k (Dune, @adam_tehc). - However, Bonk is not currently looking to respond to CCM. It lacks the $1bn warchest of Pump (from their ICO) to compete in this domain, and perhaps also knows it has proven to be a self-defeating game that may fizzle out. - Instead, Bonk has somehow managed to become the official launchpad of the USD1 Stablecoin (World Liberty Financial/Trump Family official stablecoin). - "WLFI, in collaboration with @bonk_fun and @RaydiumProtocol, is making available up to multi-million-dollar promotional rewards for eligible participants trading USD1 pairs". - What does "USD1 pairs" mean? Rather than being traded against SOL, memecoin pairs will be traded against USD1. - What does "promotional rewards for eligible participants" mean? "Traders will get up to 60% and creators up to 15% cash back on fees generated and claimable every 24 hours."
(Solana and Raydium appear to be aligned, in the comments of the WLFI post)
- USD1 Rewards on BNB drove $30B of volume in its first month - for reference, total weekly volume across all launchpads on Solana is topping out at $1.5B ($6B monthly). Bonk is the exclusive USD1 launchpad.
Second Order Effects
- Pumpfun:
- Incentives currently at play when it comes to pumpfun's CCM strategy:
- Creators: incentivizes devs/'creators' at the early stage of the market cap range (particularly between 100k and 1m). Genuine creators are in fact rewarded well for participation. However, given the ease of creating new coins, the incentives skew towards serial devs who can extract value in this market cap range over and over again.
- Traders: the sheer number of new coins being created make rotation the optimal strategy (grinding +EV spots over time). Runners are rare and therefore it is often -EV to exclusively size into perceived runners.
- Incentives currently at play when it comes to pumpfun's CCM strategy:
(Kind, one of the leading CCM coins, is down 85% from the highs with no sign of incremental demand)
- Pump's CCM vision only succeeds if incentives are skewed towards holding strong creators - which they currently aren't as shown above. Therefore, this meta is self-defeating until proven otherwise.
- How does CCM become self-reinforcing?
- Consistent pump streamer begins to go viral for the content quality (rather than any other gimmick). Early investors make $$$. Spurs a flywheel -> influx of retail capital -> influx of newer streamers aiming to replicate.
- In order for this to happen, fees have to be sustainable (given the tapering fee structure and dilution of attention (and volume) as more creators are attracted to the pie. And how that relates to the moat of said creator/token.)
Looking at this data, the following possibilities arise:
- Since the introduction of Project Ascend, an influx of new token launchers (streamers) have been successfully onboarded into the ecosystem.
- Devs have realized that the incentives skew even more towards launching coins than before, and have set up bots to constantly launch coins.
- Bonkfun Second Order Effects:
- Narrative: bringing back the memes.
- Incentives:
- USD1 targeting Solana trenches to drive numbers for its stablecoin.
- Traders: receive rewards to trade USD1 denominated memes.
- While pump is inherently trying to change the behaviour of the trenches, bonk is merely offering rewards on top of the existing behavioural patterns -> much easier.
- Underlying mechanism: self defeating. Adds nothing innovative or new apart from slight incentives. Trench participants are jaded and poor. Bonk tokens may do well with a crime injection of actual capital/liquidity into coins by WLFI foundation -> they are incentivized for this scheme to have runners/perform well. However, this is artificial demand, hard to quantify in advance, and difficult to time exits.
- Could Bonk foundation have accepted this deal with the premise that WLFI would inject liquidity into Bonk itself?
(Bonk chart doesn't look too bad. July pump was a consequence of its increasing market share)
Trade Thoughts
- Pump has rallied well off the lows. But continuation hinges on the success of both trenches generally (to keep revenues strong) and particularly CCM finding its feet. Currently though, market confidence appears to be faltering. However, with pump's $1bn+ warchest, it is unlikely that they will allow CCM to fail at this hurdle. Depending on CCM tweaks/developments, Pump could be a decent buy on a pullback to $1.25-2bn marketcap.
- If CCM begins to actually succeed, I believe infra related tokens such as clipping coins are higher R:R than individual streamers -> sell picks in a gold rush.
- Bonk currently has minimal revenue/market share and the USD1 play seems to be yet more manipulation/crime by the Bonk team. May well gain back some market share as some liquidity is injected, but R:R is not great in my view.