Pump.fun is launching a trading volume-based rewards system to counter the growing dominance of its rival, LetsBONK. The Solana-based token launch platform aims to boost user engagement and regain its slipping market share.
A research thread by Dumpster DAO on July 26 revealed that Pump.fun has updated its Software Development Kit (SDK) to introduce a rewards system. This setup will allocate PUMP tokens to users based on their trading activity. The SDK update includes functionalities for tracking user volume and adjusting reward parameters dynamically, using a 30-day Solana volume window. However, Dumpster DAO has flagged that the framework may evolve as the platform refines its strategy.
Pump.fun’s Ambitious Incentive Plan
The new incentive program includes a potential daily distribution of up to 1 billion PUMP tokens. This figure, although reportedly a placeholder, represents a staggering 3% of the platform’s total token supply each month. Dumpster DAO expressed scepticism about the sustainability of these numbers: “Distributing 3% of the supply as rewards in just one month seems high.”
The initial reaction to the proposed incentive program was positive. PUMP’s price surged by 5% within an hour, reaching $0.002875. This rally offered a brief respite following a sharp decline of over 47% from its peak of $0.066.
LetsBONK Dominance
Meanwhile, LetsBONK has rapidly eclipsed Pump.fun in the market. LetsBONK seized 37% to 55% of daily active token creators, up from just 3% to 10%. Earlier in July, Pump.fun’s share fell below 50% for the first time, with LetsBONK’s rising to 49.6%.
Moreover, in terms of high-performing token launches, LetsBONK hosted 64% of tokens reaching market caps above $500,000. In comparison, Pump.fun and Moonshot captured only 11.1% each, trailed by Jupiter Studio and Launchlab.
LetsBONK’s surge in activity has led to substantial revenue growth, peaking at $1.78 million in daily earnings by July 21.
Pump.fun’s Strategic Moves
The incentive program is part of Pump.fun’s broader strategy to claw back market share. Data from Dune Analytics revealed that LetsBONK has continued to outpace Pump.fun, capturing roughly 84% of the market by July 25, while Pump.fun’s has dwindled to 12%. On the same day, LetsBONK generated over $1.3 million compared to Pump.fun’s $254,000.
Pump.fun’s struggles are further compounded by investor disappointment. The PUMP token has plummeted over 50% from its ICO price, fuelled by the announcement that an expected airdrop would not occur, conflicting with market expectations.
*Disclaimer: This article does not constitute financial advice. Always conduct your own research before investing in any crypto project.
