On June 5th, it was reported that Dune panel data created by crypto analyst @defioasis shows that among the approximately 4.257 million addresses that have conducted over 10 token transactions on the popular cryptocurrency trading platform pump.Fun in the past six months, the situation is not optimistic. More than 60% of the addresses are in a state of loss.
Among these loss-making addresses, approximately 2.408 million addresses (accounting for 56.6%) have loss amounts ranging from 0 to 1,000 US dollars, indicating that small losses are relatively common. Meanwhile, about 1,700 addresses suffered losses of more than $100,000, among which 46 addresses had losses of over $1 million.
In contrast, for addresses in a profitable state, the number of addresses with a profit amount ranging from 0 to 1,000 US dollars is the largest, reaching 916,500, accounting for 21.5%. In addition, there are more than 5,000 addresses with a profit of over 100,000 US dollars, while there are 311 addresses with a profit of over 1 million US dollars.
pump.fun, a well-known meme coin issuance and trading platform on the Solana chain, has rapidly gained popularity since its launch in January 2024. It allows anyone to create Solana tokens for free within one minute, greatly lowering the threshold for token issuance and triggering a meme coin issuance craze. Over the past year and more, the platform has issued more than 5.7 million tokens, accounting for 71% of Solana’s daily token issuance, and earned hundreds of millions of dollars in its first year of operation.
However, judging from the data released by the analysts this time, frequent trading on pump.fun is not a wise move. The cryptocurrency market itself is highly uncertain and volatile, and this is especially true for meme coins traded on pump.fun. The value of meme coins often lacks actual value support and is mostly driven by market sentiment and speculation. Their prices fluctuate sharply and are difficult to predict.
From the perspective of transaction costs, pump.fun charges a 1% handling fee for each transaction. Frequent transactions lead to the continuous accumulation of handling fee costs, eroding investors’ profits. From the perspective of market randomness, its price fluctuation is approximately a random walk, the average return of multiple transactions tends to zero, and the existence of transaction costs makes the return more likely to become negative. At the same time, investors’ psychological biases, such as overconfidence and buying high and selling low, are also very likely to be magnified during frequent trading, increasing the probability of losses.
Although some investors have reaped high profits from trading on pump.fun, for the majority of frequent traders, the trading results in the past half year have not been ideal. This also reminds investors that when participating in cryptocurrency trading, especially on high-risk platforms like pump.fun, they need to carefully assess the risks and avoid blindly frequent trading to prevent unnecessary losses. The subsequent changes in the transaction data of the pump.fun platform and the adjustment directions of investors’ trading strategies deserve further attention.
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