Solana-based meme coin deployer Pump.fun has allocated millions of dollars to buy back its recently launched PUMP token, driving its price higher.
Analytical platform Lookonchain disclosed this morale-boosting effort in a tweet today. Specifically, it noted that Pump.fun had prepared 187,770 SOL ($30.6 million) to repurchase a portion of its native PUMP token in circulation.
It realized the funds from its fee revenues, which recently exceeded $700 million. Recall that the platform became the fastest-growing crypto platform when it crossed $100 million in revenue in 217 days, following instant traction towards its no-code meme deployer.
PUMP Reacts as Pump.fun Resumes Repurchase
Notably, Pump.fun resumed the buyback course today and has spent 118,351 SOL worth $19.26 million to acquire 2.99 billion PUMP. This culminated in an average price of $0.0064, which is miles above its ICO price of $0.004.
The buyback triggered a bullish uptick for the PUMP token, which rallied over 20% to a price high of $0.00068 before relinquishing some of its gains. The token is currently trading at $0.00066, representing a nearly 10% increase in the past 24 hours.
Meanwhile, the buyback comes on the heels of a price capitulation after its ICO offering. For context, the token surged to an all-time high of $0.012 on July 12 but dropped 57% to $0.0051 two days later.
Notably, an announcement from Coinbase regarding PUMP’s listing revived the token’s momentum before Pump.fun initiated its buyback. Meanwhile, market observers have raised concerns about the sustainability of this “artificial” price boost, with some insisting that PUMP’s lack of utility would only make the rally temporary.
PUMP Fails to Build on ICO Momentum
Remarkably, the Pump.fun team raised $500 million in 12 minutes following its public offering on July 12. It dedicated 33% of the PUMP token’s supply to its ICO program, selling 18% to institutional investors and 15% to retail.
Despite the strong start, PUMP has quickly lost momentum, resulting in a sharp decline in its price. It remains unclear where the selling pressure came from, but critics argued that it would be difficult to hold a token that offered no real utility. For context, PUMP has no governance, staking, or mechanism for revenue sharing, making it less attractive to some.
Moreover, Pump.fun’s recent decline in platform activity further adds to the skepticism. Its numerous legal fracases have led to a drop in its trading volume, from $11.62 billion in January to $3.65 billion in June. So far in July, Pump.fun has a DEX volume of $885.61 million.
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