PumpFun's Buyback Strategy Fails to Boost PUMP Token Amid Heavy Whales Selling Off Coins

Pump Coin Faces Downward Pressure Despite Innovative Buyback Strategy

The recently launched token by Memecoin launchpad PumpFun, referred to as PUMP, is experiencing substantial market pressure in spite of implementing a distinctive buyback strategy. The plan introduced to boost the PUMP token value appears to be struggling to deliver on expected results. The launchpad’s buyback wallet, humorously dubbed kippahstayson.sol in observance of the memecoin adage “the hat stays on”, mobilised approximately $20 million for the acquisition of PUMP tokens this past Tuesday. The invested funds were drawn from PumpFun fee-associated wallets, including a staggering $17 million transfer from a single AMM fee wallet.

Ideal Expectations vs Real Market Performance

Contrary to the probable expectations of PUMP holders, the token has depreciated by nearly 10% within the last 24 hours. This depreciation is exacerbated by the sale of PUMP worth over $100 million by two initial coin offering (ICO) whales since the token’s inception. One of the factors propelling this downturn seems to be the massive selling of tokens by funds that initially acquired PUMP during its ICO, which valued the token at an impressive $4 billion. Notably, a single wallet that bought 25 billion PUMP for a whopping $100 million sold more than half of its holdings – over $50 million worth of PUMP tokens in less than two days. A second case is another wallet that procured 12 million PUMP for a bit over $50 million, and has since offloaded more than 80% of that initial investment – approximately $62 million.

Funds Earmarked for Further Buybacks

However, there’s still a ray of hope. The buyback wallet, staying true to its playful memetic spirit, presently has 69,420 SOL in reserve. This amount, which is equivalent to almost $12 million, is expected to be used for additional PUMP acquisitions and subsequently channelled to the PumpFun treasury. Unique to most other protocols with a similar buyback model, the details regarding the fee percentages, as well as the frequency of PUMP repurchases, have not been made public. It’s only known that these initial buybacks are powered using the past fees accumulated by the protocol. This lack of clarity is potentially causing many investors to hesitate before diving into PUMP.

Memecoin Trading Decline

The volume of revenues generated by the Pump ecosystem has waned recently due to an industry-wide reduction in memecoin trading. The emergence of rival platforms such as LetsBonk has also contributed to this slowdown. Nonetheless, PumpFun still stands as the third-biggest earner across the decentralised finance (DeFi) sector over the previous year and holds the sixth position over the last 30 days. Despite the challenges, PUMP succeeded in producing $29.5 million in revenue in the past month alone.

Buyback Strategies Gain Popularity

Buyback strategies are becoming increasingly popular in the world of DeFi. This trend is perhaps spurred by the success of the Hyperliquid’s assistance fund. It has used protocol fees to repurchase a noteworthy $1.27 billion worth of its own token, HYPE. This financial mechanism is especially beneficial for protocols with consistent fee accumulation. Even as there are noteworthy uncertainties and high stakes, the exciting world of memecoins and DeFi continues to charm investors from all corners. As the heart of the crypto-verse, tokens like PUMP will continue to tell a thrilling story of ambition, innovation and sometimes, unpredictability.

PumpFun’s Buyback Strategy Fails to Boost PUMP Token Amid Heavy Whales Selling Off Coins