Pump.fun, a prominent Solana token launchpad, continues to pull in millions of dollars via memecoin trading even as the majority of established tokens struggle to bounce back from severe declines.
Figures from DefiLlama show that the platform generated roughly $18.6 million in protocol revenue during the seven days leading up to Oct. 7. Meanwhile, a study by Talos revealed that 81% of a curated selection of memecoins had plummeted by at least 90% from their all-time highs, with rebounds from such deep downturns proving rare.
This disparity highlights a core division within the memecoin sector: while activity across Pump.fun can enrich the platform itself, fund PUMP buybacks, or benefit specific users, it does not guarantee relief for anyone holding a token whose buyer demand has vanished.
For its survival analysis, Talos evaluated 150 memecoins, and 151 for return comparisons, requiring each digital asset to have pricing data available on at least one centralized exchange. Because this criterion naturally filters for comparatively successful tokens, the findings likely underestimate the failure rate across the broader ecosystem of launchpad coins that never achieve centralized listings.
Even within this stronger group of assets, the losses were profound.
The typical token reached its peak roughly 17 days after exchange trading commenced. Talos defined a collapse as a 95% drop from that eventual peak, calculating a median span of about 370 days between the high point and hitting that threshold.
Only a tiny portion of collapsed tokens ever climbed back to their previous highs, and just five out of the 151 coins in the return sample stayed above their initial day-one price. Furthermore, Talos’s examination of major Solana memecoins indicated that active addresses holding balances of at least $1 had dropped to no more than 7% of their peak levels.
Such trends imply that attention tends to shift elsewhere rather than returning to salvage older holdings. Talos found that roughly two-thirds of the Solana-era memecoins it analyzed never mounted a significant secondary rally following their initial surge.
For individual traders, this dynamic results in an economic exposure that differs vastly from the one experienced by Pump.fun itself.
Memecoin churn keeps Pump earning
Pump’s revenue generation relies on transactions taking place anywhere across its ecosystem and does not depend on older tokens staging a recovery.
When a trader sells one declining coin and pivots to another, it triggers a fresh fee-generating transaction. Consequently, new token debuts, rotations between assets, and waves of speculation can sustain platform earnings even while prior buyers sit on heavy losses.
DefiLlama data indicates that traders paid approximately $52.5 million in fees during the seven-day period ending Oct. 7, with roughly $18.64 million going directly to the protocol. Over a 30-day window, total fees hit about $184.5 million, while protocol revenue climbed to roughly $60.7 million.
Where that money ultimately ends up depends on the distribution channels.
Pump’s fee model splits trading revenue among the protocol itself, creators, and liquidity participants. Additionally, its native PUMP token features a mechanism involving buybacks and burns, tying its value to broader activity across the platform.
DefiLlama tracked roughly $8.45 million in PUMP token burns over a seven-day span and $27.29 million over 30 days. Pump has pledged to use a portion of specific revenues to buy back and burn PUMP tokens over a one-year period beginning in April.
However, this setup offers little direct benefit to someone holding a separate, unrelated memecoin.
For those particular investors, a financial recovery still relies entirely on demand returning to their specific asset, sufficient liquidity to cash out, and payouts large even to offset the depreciation of the token itself.
Even so, Pump.fun maintains that it is increasing the proportion of platform economics passed on to users.
Alon Cohen, co-founder of the memecoin launchpad, reported that over 140,000 users collectively brought in roughly $4.46 million during a recent 24-hour window, which included $730,000 in Holder Rewards, $330,000 in Callout Rewards, and $3.4 million in creator fees.
“In time, Pumpfun will vastly outperform the social media industry in user payouts & rewards,” he stated.
These distributions reinforce Pump’s assertion that it is increasingly sharing trading revenues rather than keeping everything at the protocol level. However, the three distinct categories target different participants.
Creator fees are intended for the individuals behind the tokens. Callout Rewards compensate eligible promoters or contributors. Holder Rewards apply strictly to specific participating coins and do not automatically reach every single holder of a Pump-launched asset.
This distinction becomes critical when token losses are weighed against the rewards received.
A holder might collect distributions and still experience a net loss if the underlying coin depreciates at a faster rate. Similarly, a creator can haul in substantial trading fees even as buyers who purchased near the market peak suffer drastic drawdowns.
Holders of PUMP face a different set of variables. While buybacks stimulate demand and token burns shrink the circulating supply, the asset carries its own market volatility and does not grant any contractual claim over Pump.fun’s overall revenue. Scheduled token unlocks can also introduce new supply into the market even as burns remove tokens.
As speculation flows through the platform, the economics diverge. Pump can profit from total trading volume, PUMP can capture a slice of that action via buybacks, and chosen creators or holders can secure fee distributions. None of these outcomes guarantees a financial rescue for an investor waiting for buyers to return to an older memecoin.
This gap is set to grow more significant as Pump scales up its reward initiatives.
If these payouts expand enough to meaningfully offset declining token values for holders, they could reshape the financial reality of remaining invested after the initial speculative frenzy dies down. Conversely, if trading activity continues migrating toward brand-new launches faster than rewards accumulate in older ones, Pump may successfully convert continuous churn into revenue while many of the traders fueling that activity remain trapped in positions they cannot exit at break-even.