Where the Smart Money’s Moving After Pump.fun

This episode reveals the stark reality of diminishing returns on Pump.fun, urging investors to pivot from the lottery-like odds towards more strategic, data-backed opportunities in emerging crypto ecosystems.

The Diminishing Returns of Pump.fun

• The speaker opens with a challenging assertion: "You literally have more chance of winning the lottery than hitting a million-dollar trade on Pump.fun." This claim is rooted in data from the past six months, signaling a significant downturn in the platform's viability for substantial profit.
• While maintaining a long-term bullish outlook on Solana (a high-performance blockchain), the speaker, whose perspective is analytical and data-driven, argues that the specific opportunity on Pump.fun has been "completely decimated."
• Pump.fun is a platform on Solana that allows for the quick and inexpensive launch of new tokens, primarily meme coins, fostering rapid trading cycles.
• The speaker aims to cut through the hype, presenting "cold hard facts" to guide investors toward more promising ventures.

Pump.fun by the Numbers: Impressive Revenue, Declining Prospects

• Pump.fun demonstrated remarkable early success, achieving $742-743 million in revenue, indicating strong initial product-market fit. The speaker notes it was "the fastest business on earth to $100 million," underscoring the initial speculative frenzy.
• However, key metrics now show a decline. The trend for tokens graduating from Pump.fun to larger exchanges like Radium (and now Pump Swap, its native platform) is consistently downward. The weekly graduation rate has fallen from a peak of 1.67%.
• Trading volume on Pump.fun is also decreasing, suggesting waning interest or market saturation.
• Strategic Implication for Investors: These declining metrics are critical red flags, suggesting that capital and attention should be redirected from Pump.fun to platforms exhibiting healthier growth and more sustainable tokenomics.

The Insider's Edge: Rapid Token Graduations on Pump.fun

• Data analysis reveals a striking pattern: 38% of tokens graduating from Pump.fun do so in under five minutes. The speaker interprets this as strong evidence that success often hinges on insider information or continuous, highly dedicated platform monitoring.
• "Either the tokens are obvious and they're going to bond... or again the title of the micro slider is you best know someone," the speaker states, emphasizing the disadvantage for casual participants.
• This rapid graduation phenomenon suggests a market dominated by those with pre-existing connections or sophisticated, high-speed automated trading setups (bots), making it exceedingly difficult for average retail investors to compete effectively.
• Some traders focus exclusively on pre-bonded tokens, which are tokens traded only on Pump.fun before they achieve the necessary liquidity to "graduate" to a decentralized exchange (DEX) like Pump Swap.

The Harsh Reality: Pump.fun Profit and Loss Statistics

• A six-month statistical review of Pump.fun trading activity reveals a sobering picture for profitability:
  • No wallet achieved over $1 million in profit.
  • Only 0.1% of wallets profited between $100k and $1 million.
  • A mere 1.1% of wallets made $10k to $100k.
  • 4.5% of wallets profited $1k to $10k.
  • The largest group of profitable wallets (21.7%) earned between $0 and $1k.
• Losses are widespread and significant:
  • 56.4% of wallets lost between $0 and $1k.
  • 5.2% of wallets lost between $1k and $10k.
  • A notable 1,651 wallets lost between $100k and $1 million.
  • Forty-six wallets incurred losses exceeding $1 million.
• Actionable Insight for Crypto AI Investors: These statistics starkly illustrate an unfavorable risk-reward profile on Pump.fun. Data-driven investors should recognize this as a clear signal to re-evaluate and likely redirect their capital and research efforts away from this platform.

Why Pump.fun's Game Is Now Unfavorable: Gamification and Bot Dominance

• The speaker attributes Pump.fun's declining opportunity to its "one-dimensional product" structure: launch, achieve a set markup, and bond. This simplistic mechanism was "extremely gamified and figured out really, really quick" as the core variables remained static.
• The platform has largely become a "cat and mouse game" dominated by bots designed to snipe tokens at launch or execute mass-buying strategies. "It's all scripts. It's not manually being won by the average pointer on there,” the speaker clarifies.
• This automated environment heavily disadvantages human traders, particularly those new to the space who might be attracted by narratives of quick wealth.
• Further illustrating the poor odds, of the 6.8 million tokens launched in the last six months, only 71,000 (a mere 1.05%) successfully graduated.

The Pump.fun Airdrop: A Dubious Incentive?

• Amidst this challenging trading environment, Pump.fun has announced an upcoming airdrop (a free distribution of tokens to platform users). The team has ambitiously claimed it will be "the biggest airdrop the space has ever seen."
• The speaker provides context by referencing major past airdrops, such as Hyperliquid (initially $1.6 billion, potentially over $10 billion at current valuations) and Uniswap (around $6 billion at its peak).
• However, skepticism is expressed regarding the realistic chances for new or low-volume users to meaningfully qualify for the Pump.fun airdrop, given the platform's maturity and the established positions of early, high-volume traders.
• Strategic Consideration for Researchers: The Pump.fun airdrop will serve as an interesting case study for Crypto AI researchers analyzing token distribution models, community engagement strategies, and their effectiveness in revitalizing potentially saturated platforms versus primarily rewarding entrenched early adopters.

Airdrop Qualification: The Insurmountable Volume Barrier

• The speaker contends that it's nearly impossible for users not already significantly active on Pump.fun to "catch up" and qualify for a substantial portion of the airdrop. Data indicates that only two non-bot wallets have exceeded $100 million in trading volume.
• Approximately 952 wallets have traded over $10 million, while around 12,000 wallets have surpassed $1 million in volume. The vast majority of users (roughly 3 million) are clustered around the $1k volume mark.
• Sharing personal experience, the speaker notes that $156,000 in volume from 97 trades placed their wallet in the top 0.5 percentile. "If it's more than that, fair play. You're going to do really, really well, I think. If it's less than that, then I don't know."
• Investor Takeaway: Unless an investor already possesses a very high trading volume on Pump.fun (likely significantly above $150,000), the effort and capital risk required to meaningfully improve airdrop allocation at this stage appear unjustified given the platform's diminishing returns.

Pump.fun's Fundraising Amidst High Profitability

• Pump.fun is reportedly in the process of raising $1 billion at a $4 billion Fully Diluted Valuation (FDV), which involves selling 25% of its total token supply. FDV represents the total market value of a project if all its tokens, including those not yet in circulation, were trading at the current market price.
• The speaker questions the rationale behind this substantial fundraising effort, considering Pump.fun has already generated $750 million in revenue and holds the distinction of being one of the fastest businesses to achieve such financial milestones. "Have you not already won? Like, how much do you really need?"
• The platform exhibits exceptional revenue per employee, a metric where it is surpassed only by Hyperliquid and Tether, outperforming tech giants like Nvidia, Apple, and Meta.
• Note for Researchers: Pump.fun's strategy of raising significant external capital despite high internal profitability, followed by a large airdrop, presents a compelling case study in crypto-native business models, tokenomics design, and value distribution strategies.

The Likely Futility of Chasing the Pump.fun Airdrop Now

• Reiterating the extremely low 1.05% graduation rate for tokens on Pump.fun, the speaker strongly advises against continued activity on the platform solely for airdrop prospects, given the poor underlying trading odds.
• "There's way better opportunities elsewhere," is the central thesis, advocating for a strategic reallocation of resources away from the over-exploited Pump.fun environment.
• The speaker's analysis concludes that while the airdrop might be substantial in total value, it is unlikely to significantly benefit latecomers or those with low existing volume enough to warrant the continued risk and effort on the platform.

Pivoting to Greener Pastures: Identifying New Opportunities

• The speaker champions a strategic shift towards "newer pastures" and engaging in markets that are less saturated—effectively, playing at the "stupid person's table" where the competitive landscape is not yet dominated by sophisticated entities or automated systems.
• "You don't want to walk into a casino and go and play with the sharks... that's the situation that we're in currently with kind of Pump.fun."
• This approach involves identifying and participating in emerging crypto ecosystems where the "game" has not been fully optimized, offering a higher potential for early-mover advantages.

Echo.xyz: Democratizing Access to Early-Stage Crypto Deals

• One promising alternative highlighted is Echo.xyz, described as a fair launch and fair access crowdfunding platform associated with Kobe (a prominent figure in the crypto community). Its mission is to provide retail investors with access to early-stage deal flow, similar to private funding rounds (e.g., pre-seed, seed), by launching projects at a Series A-equivalent valuation.
• The platform utilizes "group leaders" (such as The Economist, Coinbase Ventures, Comfy Capital) to curate and present investment opportunities. A crucial operational rule is that these deals cannot be publicly discussed outside the Echo platform until they are officially activated.
• Participation requires KYC (Know Your Customer), a standard identity verification procedure common in regulated financial contexts.
• Investor Insight: Echo.xyz signals a trend towards more equitable access to early-stage crypto investments. For investors, it may offer higher-quality, vetted deal flow compared to open, anonymous launchpads, albeit with the requirement of identity disclosure.

Base Ecosystem: Spotlight on AI and Infrastructure Projects

• Despite previous reservations about the Base ecosystem (an Ethereum Layer 2 solution incubated by Coinbase), the speaker acknowledges recent positive developments and emerging opportunities.
• Giza, identified as an AI infrastructure and framework protocol operating on Base, recently experienced a notable 3x price appreciation. The speaker mentions having previously covered Giza on BlockMates, suggesting it was an early signal.
• Another token (initially misheard as "Kita," but contextually likely referring to Giza or a similar project on Base) reportedly saw a staggering 39,500% increase since the beginning of the year. However, the speaker approaches this with caution, suspecting potentially unsustainable market dynamics akin to those seen on Pump.fun.
• Focus for Crypto AI Researchers: The specific mention of Giza as an "AI infrastructure and framework protocol" directly aligns with the interests of Crypto AI investors and researchers. This points to potential investment or research avenues in AI-centric crypto projects developing on emerging Layer 2 networks like Base.

Virtuals Ecosystem: Demonstrating a Strong Resurgence

• The Virtuals ecosystem is commended for its significant recent performance, with numerous projects achieving "significant numbers every single day."
• The speaker praises the ecosystem for its successful rebound from a period of diminished mindshare, attributing this to effective gamification strategies and the creation of valuable opportunities for those investing in its early-stage projects. "Virtuals has been absolutely thriving."
• This revival underscores how dedicated communities and well-crafted tokenomic models can regenerate interest and drive value, even after initial hype cycles subside.

Avalanche Ecosystem: SocialFi Innovation on Arena

• The Avalanche ecosystem is presented as a "slow cook" opportunity, with its Avalanche Arena platform steadily gaining traction. Arena originated as a competitor to Friend.tech (a SocialFi application where users trade tokenized "keys" or "shares" linked to individuals' social influence) and has since evolved into a more comprehensive social application.
• SocialFi refers to applications that blend social networking with decentralized finance.
• "It's basically the best social app than Twitter in my opinion," the speaker remarks, expressing admiration for Arena's features, which include "stages" and an integrated facility for users to launch their own tokens via Arena Swap/Arena DEX.
• Several tokens launched on Arena, such as ID (reaching a $40M market cap), Lambo ($30M), and Meanie Spaghettini ($13M), have demonstrated strong performance. Another token, K, has achieved a $580M market cap.
• Strategic Trend for Researchers: The success of SocialFi platforms like Arena, with their integrated token launch capabilities on blockchains such as Avalanche, indicates a growing convergence of community-driven finance, social interaction, and token speculation. This is a key area for Crypto AI researchers to monitor.

Preferred Frontier: Hyperliquid and the Hyper EVM Ecosystem

• The speaker identifies their current preferred area for opportunities as the nascent ecosystem of Hyperliquid and its Hyper EVM. Hyperliquid is known as a decentralized perpetuals exchange, and Hyper EVM is its companion Layer 2 scaling solution.
• Particular focus is given to LIQD, the DEX aggregator for the Hyper EVM. A DEX aggregator sources liquidity from various decentralized exchanges to offer users the best possible trading prices. LIQD aims to function similarly to Jupiter on Solana but also incorporates features reminiscent of Pump.fun for new token launches.
• The speaker has been "incessantly posting about this," tracking LIQD's market cap growth from $29 million to $87 million (a 3.3x increase).
• The primary attraction is that it's an early-stage ecosystem where the "game isn't kind of figured out just yet," featuring "anti-creator Jeet dynamics" (mechanisms designed to discourage immediate selling by early participants or creators) and innovations that maintain product simplicity while adding robustness.
• Actionable Strategy for Crypto AI Investors: Exploring new Layer 2 solutions like Hyper EVM and their native DeFi primitives (e.g., LIQD) offers a strategic opportunity for early-mover advantage, analogous to the early days of the Solana ecosystem. The potential for a second Hyperliquid airdrop, earned by interacting with the ecosystem, provides an additional incentive.

Adopting a Long-Term Mindset: Beyond the 100x Chase

• The speaker strongly advises against depleting capital by chasing elusive 100x returns, a behavior pattern that often leads to significant losses as market dynamics evolve and early advantages disappear. "The game has already been figured out and it's just a fool's errand."
• A more sustainable and prudent strategy involves consistently compounding smaller, yet significant, gains over time, rather than fixating on a single, life-changing "mythical wealth number." True wealth creation in markets is described as a "continual game for over decades."
• The core strategic advice is to avoid "playing at the sharks' table" (such as the current state of Pump.fun) and instead seek out "earlier environments where the niche hasn't been discovered" and the competitive landscape is less optimized.

Upcoming Deep Dive: Navigating the Hyperliquid Trenches

• The speaker provides a preview of the next episode, which will offer a detailed guide to the "Hyperliquid trenches." This forthcoming content will focus on transferring trading knowledge and strategies from the Solana ecosystem to the Hyper EVM.
• Topics will include essential tools, effective bots, optimal filter settings for platforms like DeFi Llama and Dex Screener, and techniques for identifying early opportunities within the Hyperliquid ecosystem.
• This signals a commitment to equipping the audience with actionable intelligence for navigating this emerging and potentially lucrative crypto frontier.

This episode underscores the critical need for investors to adapt, shifting from saturated platforms like Pump.fun to less crowded, emerging ecosystems like Hyperliquid. Proactive research into new L2s and their DeFi primitives is key to capturing early-mover advantages in the evolving crypto landscape.