What Is a Fair Price for PUMP?

This article is from Blockworks Research; original author: shaunda devens

Compiled by Odaily News (@OdailyChina); translated by Azuma (@azuma_eth)

Key Takeaways

• PumpFun has built one of the most profitable and durable infrastructure businesses in crypto. It currently generates $677 million in annualized revenue and has the lowest weekly revenue volatility among the top ten revenue-generating protocols. PumpFun's business consists of two parts: an infrastructure layer (launchpad and DEX) with deep moats, and a fast-growing consumer layer targeting social trading. Since early July, its front-end trading volume has grown 5.6x.
• PUMP is one of the few highly liquid assets that provides direct exposure to meme coins and the consumer layer. It broadly captures meme coin market activity while exhibiting strong reflexivity, as its revenue is directly tied to token price appreciation—the correlation coefficient between PUMP's weekly price changes and weekly revenue changes is 0.35, ranking third among 46 revenue-generating tokens. Despite this, PUMP currently trades at a P/S (price-to-sales) ratio of only 2.8x, a significant discount to comparable assets. We believe it is one of the most mispriced assets in crypto today, for two main reasons.
• First, while token holder alignment risk remains, we believe the market is over-weighting this risk in the near term. PumpFun allocates 50% of revenue to programmatic buybacks, which at current prices equates to absorbing roughly 17.6% of circulating supply annually. Meanwhile, approximately 77% of tokens allocated to insiders have not moved. The team reportedly holds about $2 billion in treasury assets, suggesting they clearly recognize that a rising token price generates significant attention and market effects compared to competitors without tokens. Therefore, we expect insider selling to remain low, creating favorable short-term flows beyond the buybacks.
• Second, we believe the market still misunderstands PumpFun's core business. A decline in overall meme coin market cap does not mean PumpFun's business is deteriorating, as 96% of its revenue comes from tokens with market caps below $1 million. If anything, this reflects PumpFun's own dominance: the launchpad has achieved such strong market stickiness that capital flows are dispersed across thousands of tokens. Current token issuance is at its highest level since the January 2025 peak, the number of graduated tokens is at an all-time high, and PumpFun's revenue denominated in SOL is also at an all-time high. With further business expansion, if the industry returns to January 2025 activity levels, PumpFun would generate approximately $280 million in monthly revenue, nearly double its historical peak monthly revenue.
• Our base case assumes market activity recovers to the monthly average since April 2024. August data alone already exceeds this level in token issuance and curve trading volume, implying annualized revenue of $836 million and a 21.7% buyback yield. Across three scenarios, we value PUMP at $0.0108–$0.0205, or 2.3–4.4x the current price. In a bull scenario, PUMP's upside reaches 6.4–12.9x the current price; in a bear scenario, if market activity returns to June lows and valuation multiples fall to historical lows, PUMP could face a 59%–76% drawdown.

PumpFun's Monopoly Position

In the upcoming bull market, we want to hold two types of tokens: reasonably valued, revenue-generating businesses, and reflexive tokens that benefit from high activity driven by speculation. PUMP possesses both attributes.

At the infrastructure level, PumpFun holds market leadership through its launchpad and DEX; simultaneously, it continues to advance control over front-end entry points through Terminal and mobile. Therefore, PUMP is essentially a broad, liquid "pick-and-shovel" investment that directly benefits from speculative activity.

With near-monopoly control over the infrastructure layer, PumpFun currently processes 70% of Solana meme coin trading volume and roughly half of all-chain meme coin DEX volume. Despite the meme coin industry's rapid changes and cyclicality, PumpFun has not only maintained its dominance in the launchpad space but also continues to capture DEX volume and expand into new verticals like the consumer layer.

Ultimately, this has created one of the most profitable businesses in crypto: cumulative revenue of $1.37 billion since 2024. Excluding stablecoin issuers, PumpFun's revenue this year ranks second only to Hyperliquid, making it one of the highest-revenue applications in the entire crypto industry.

Despite market concerns about revenue sustainability, PumpFun's revenue base is actually more stable than other top protocols: its weekly revenue volatility is only 29.7%, the lowest among the top ten revenue-generating protocols.

PumpFun's Infrastructure: Launchpad and DEX

PumpFun's business foundation consists of two core meme coin infrastructures: the launchpad and the DEX.

The launchpad simplifies token creation while eliminating the requirement for projects to pre-fund AMM liquidity. Tokens initially trade on a bonding curve AMM with "virtual reserves"; as users buy, real reserves accumulate and are used to fund liquidity pools after the token "graduates."

This liquidity pool is then created on PumpFun's own DEX—PumpSwap. This allows PumpFun to continue capturing trading fees after tokens enter the secondary market, rather than ceding that revenue to external trading platforms.

By bundling token creation and liquidity formation into a single product, PumpFun offers a clearly differentiated service and charges substantial fees—125 basis points (bps) on bonding curve trades, of which PumpFun retains 95 bps.

As the launchpad becomes the default channel for meme coin issuance, its infrastructure is deeply embedded in consumer applications like Axiom and Fomo. These apps funnel users into PumpFun's markets, allowing PumpFun to benefit from trading activity across different front-ends without betting its growth on any single app's ability to retain users.

Thus, in a highly competitive industry with rapid user and traffic rotation, PumpFun has built relatively durable infrastructure advantages. Despite multiple changes in front-end market leaders, PumpFun still commands approximately 98% of Solana launchpad bonding curve volume.

Each new integration further strengthens PumpFun's distribution advantage: creators launching tokens on PumpFun gain direct access to users of these integrated apps.

The combination of launchpad and DEX enables PumpFun to cover the full lifecycle of meme coins and monetize continuously. In Q2 2026, the two generated $85.2 million in revenue; based on Q3 performance to date, the annualized revenue run rate has reached $125.4 million, up 47% quarter-over-quarter.

Of this, the launchpad contributed an annualized run rate of $87.1 million, up 41% QoQ; PumpSwap contributed $38.3 million, up 64% QoQ. Meanwhile, PumpSwap's realized take rate improved from 5 bps to 13.3 bps.

PumpFun's Consumer Layer

The second pillar of PumpFun's business, and a more ambitious step, is expansion into the "consumer layer."

For an infrastructure company, this shift has two important implications: on one hand, it allows PumpFun to capture the consumer layer of the meme coin value chain—where its fee revenue was previously leaking; on the other hand, it further solidifies its position by directly owning end users, reducing dependence on third-party platforms, and enabling continuous development of new features.

PumpFun has made several acquisitions, from acquiring Kolscan's wallet analytics business in July 2025 to Vyper's trade execution infrastructure... Currently, its consumer business revolves around two main products, targeting different stages of the token lifecycle and their respective competitors:

• Terminal, for newly issued tokens. PumpFun acquired Padre in October 2025, which positioned Terminal to serve early-stage tokens still on the bonding curve, offering professional trading services and competing directly with Axiom.
• Mobile, for graduated tokens. The app targets token pairs that have graduated and entered secondary market trading, focusing on retail social trading and competing with Fomo through product development and incentives. Kolscan's wallet tracking, trader P&L, and leaderboards help users discover trading opportunities; Callouts allow users to broadcast token recommendations to their followers and earn rewards through Callout Rewards—a daily USDC reward pool distributed proportionally based on trading volume generated by each Callout.

Together, they target the consumer layer, a critical link in the meme coin value chain. Since March 2024, this layer has contributed between 31% and 44% of monthly meme coin fees, and PumpFun has yet to truly penetrate this market.

Compared to its infrastructure expansion, PumpFun's progress in the consumer layer has been noticeably slower, as it requires direct competition with front-end platforms that have established user advantages. Currently, PumpFun significantly lags Fomo in mobile and Axiom in trading terminals.

However, we still see upside in this area for two reasons. First, PumpFun's treasury allows it to compete aggressively through incentives, with Callout Rewards alone distributing about $1 million daily; second, since PumpFun already monetizes underlying volume through its launchpad and PumpSwap, it can undercut competitors on fees—PumpFun's mobile currently charges no interface fee, while Fomo charges 0.5%.

Data suggests this strategy is working: mobile and Terminal front-end daily volume has grown 5.6x since early July. In the first week of the observation period, average daily volume was only $15 million; by the first week of September, it rose to $84 million, peaking at $100 million on Sept. 4. Over the same period, mobile daily active users grew from 5,600 to 34,100.

Although these businesses are intentionally kept free and not monetized, to demonstrate their potential commercial value, we simulate using a 50 bps fee rate similar to Fomo. Based on last week's volume, mobile alone could contribute approximately $128 million in annual revenue, equivalent to a 24% increase over PumpFun's current revenue.

Owning the front-end entry point is also highly valuable for the consumer business, as it means PumpFun can not only monetize directly but also expand into adjacent business areas.

Just as Kalshi and Polymarket leveraged their market positions to expand into related verticals, PumpFun may follow a similar path, adding perpetuals (perps) and prediction markets. In fact, PumpFun has already led a $1 million funding round for Pumpcade, which is building in live streaming and prediction markets.

PumpFun's Positioning

Overall, PumpFun's revenue performance and strategic expansion make it an infrastructure business deeply embedded in the meme coin trading system, with a resilient fee revenue base and upside potential from a fast-growing consumer business.

PumpFun also fits our overall framework for the next cycle: in a crypto market increasingly moving toward "abstracted finance," we want to invest in the infrastructure layer and the consumer layer. More uniquely, PUMP offers strong thematic investment value: meme coins, like perpetuals, L1s, spot trading, stablecoins, and prediction markets, are core verticals in crypto, and PUMP is one of the few assets providing highly liquid, pure meme coin exposure.

At a time when we believe meme coin trading volume is at depressed levels, another characteristic makes PumpFun particularly attractive: reflexivity.

PumpFun's business activity is highly correlated with speculative behavior, so higher prices lead to higher market activity and more revenue, meaning the token price can rise rapidly without relying on expanding valuation multiples. Instead, a reflexive loop gradually forms—price increases drive trading activity, activity drives revenue growth, which in turn further drives token price appreciation.

In our sample of 46 revenue-generating tokens, over the past 48 weeks (since September 2025), the correlation coefficient between PUMP's weekly price changes and weekly revenue changes is 0.35, ranking third in the entire sample, higher than HYPE's 0.32.

Despite this, PUMP currently trades at a P/S ratio of only 2.8x, a significant discount to comparable tokens. Calculated based on "outstanding tokens" and excluding the 240 billion community and ecosystem allocation, PUMP's valuation is $2.77 billion.

We believe this discount primarily reflects two factors: first, the market fundamentally misunderstands PumpFun's business, and second, concerns about token holder alignment. The latter concern is legitimate, but we believe the market is over-weighting this risk in the near term.

PumpFun's Problem: Token Holder Alignment

The core issue facing PUMP's current valuation has little to do with the business itself. The real question is: how much of the value created by this business actually accrues to PUMP token holders?

Relationship Between Token and Equity

Even during PumpFun's fundraising of over $1 billion, it was never clear how its substantial revenue would flow to token holders. The widely circulated 25% revenue share claim comes mainly from media reports, not official PumpFun communications.

Official public statements have always been very clear: PUMP does not represent equity, debt, or any rights to revenue, profits, dividends, distributions, or other cash flows of the company; moreover, buyers of PUMP should not purchase it expecting economic returns through buybacks or the efforts of the PumpFun team.

One thing is clear: the $2 billion treasury belongs to Baton Corp, not PUMP token holders; what is truly unclear is how important the PUMP token is to PumpFun's business.

One interpretation is that PumpFun discovered that issuing a token could raise over $1 billion without granting token holders any legal rights to the company's business—a highly attractive model; another interpretation is that the team is actually highly aligned with token holders but cannot publicly state so for legal reasons.

We lean toward the first interpretation; the team's past actions have not shown token holders to be a priority. In a friendly regulatory environment, if the team truly recognized a clear token-equity value relationship, there would be no reason not to publicly clarify it.

Buyback Discretion

First, this has changed in the near term. Since April 28, 2026, PumpFun has programmatically used 50% of protocol revenue to buy back and burn PUMP through a locked contract for one year. The mechanism launched alongside a $370 million PUMP burn, equivalent to 36% of circulating supply at the time.

Based on PumpFun's current trailing 30-day revenue, this means approximately $27.8 million per month is used for buybacks, corresponding to an annualized yield of about 17.6% of circulating market cap.

As of Sept. 8, the actual buyback size over the past 30 days annualizes to 16.4%, the highest token buyback scale in our comparable sample. As a percentage of market cap, this buying pressure is even higher than Strategy's historical peak BTC accumulation intensity and BitMine's peak ETH accumulation, second only to the combined buying of Hyperliquid's Assistance Fund and Hyperliquid Strategies.

Token Unlocks

However, a closely related concern is PUMP's concurrent unlocks, especially whether the team and insiders, as equity holders of the business, will choose to sell after receiving tokens.

PUMP's unlock mechanism was previously set as: 20% of supply held by the team and 13% held by existing investors, both with a 12-month cliff. This period expired on July 12, 2026, releasing a total of 82.5 billion PUMP, of which 50 billion went to the team and 32.5 billion to investors. This was followed by a three-year linear unlock phase: 36 monthly batches of 6.875 billion tokens each, with approximately 4.2 billion to the team and 2.7 billion to investors, continuing until July 2029.

Tracking the flow of these tokens is important for two reasons. First, it helps us determine the net supply effect of buybacks; second, in the absence of official disclosures, the behavior of this group is the most valuable signal we can obtain.

Insiders know best what valuation the token may achieve in the future, and how they handle their tokens reflects what they think these tokens are ultimately worth and how much long-term value they see. Our research found almost no confirmed large-scale selling.

As of Aug. 31, a total of 62.1 billion PUMP had entered relevant recipient wallets. About 5% was sold on-chain, 13% was transferred to exchange deposit addresses, and another 5% was moved to other wallets. In other words, roughly three-quarters of the tokens never left the wallets that initially received them.

If we treat all 23% that has moved as sold, then by April 2027, the circulating supply would shrink by about 8%; even if insiders sold all tokens from future unlocks, circulating supply would only increase by about 2%.

Second, in our view, the signal from this data is—the holders who know PUMP's ultimate utility best are mostly not selling. We do not think this alone proves PUMP can sustainably create value for token holders; if it did, we would consider PUMP clearly undervalued. But the data at least suggests that PUMP has some degree of value accrual mechanism, and insiders do not appear to view the token merely as a cash-out tool.

Our view is similar to the VVV situation. The VVV founder once said: "Equity holders are the largest token holders; benefiting the token is one of the most leveraged ways for equity to serve its own interests."

Similarly, PumpFun has $2 billion in assets, retains 50% of revenue, and operates in a sector of crypto that is highly dependent on market attention. PUMP itself is a significant advantage for PumpFun over competitors without tokens, and a rising token price is a powerful tool for attracting market attention.

Therefore, we believe that at current clearly discounted valuations, the team has little reason to destroy this strategic value by selling tokens in the near term. Our base case is that buybacks, limited insider selling, and low valuations will together support PUMP outperforming the market in the near term.

PumpFun's Misunderstood Business

The second reason we believe PUMP trades at its current valuation is that the market misunderstands the meme coin business and where PumpFun actually monetizes.

Measured by market cap, the meme coin market has been in a structural downtrend: the total market cap of meme coins launched by PumpFun is down 81% from the January 2025 peak; meme coins' share of the overall crypto market continues to decline; and the U.S. president personally launching a meme coin is essentially one of the most convincing top signals the market could give.

But we believe the market draws the wrong conclusion here—equating the decline in meme coin market cap directly with PumpFun's business deterioration. On the contrary, PumpFun itself may be one of the causes of this phenomenon, as market attention is dispersed across an increasing number of meme coins.

PumpFun primarily monetizes the early stages of meme coins. At the January 2025 market peak, 94% of its revenue came from tokens less than one day old, and 97% from tokens less than one month old; by August 2026, these figures were 87% and 94%, respectively.

Comparing current market activity to the January 2025 peak reveals an interesting phenomenon: August token issuance reached 69% of peak levels, bonding curve trade count reached 76%, and bonding curve volume in SOL reached 91%; meanwhile, graduation numbers have hit all-time highs.

On the other hand, the total market cap of tokens launched by PumpFun is only 19% of peak levels, and secondary market meme coin volume is only 11%; revenue in SOL reached 661,000 SOL, higher than the 647,000 SOL in January 2025.

From this perspective, PumpFun's revenue has actually hit an all-time high. Additionally, PumpFun has since launched its own DEX and Terminal. Therefore, if overall market activity returns to January 2025 levels, PumpFun would generate approximately $280 million in monthly revenue, nearly double the roughly $145 million monthly revenue at that time.

PumpFun Valuation

Translating the above analysis into valuation, we conducted scenario analysis on PumpFun's market activity and the corresponding value. Using three historical anchors, combined with current market share and take rates, we model revenue and buyback scale under different activity levels.

• Bear scenario: Market activity falls back to June 2026 lows. This was the weakest month for Solana meme coin volume since April 2024.
• Base scenario: Market activity recovers to the monthly average since April 2024. August token issuance and bonding curve volume already exceed this level, with only secondary market volume still below the average.
• Bull scenario: Market activity recovers to the average of the peak quarter from November 2024 to January 2025; additionally, we include the January 2025 peak month as a further upside scenario.

At current rates, PumpFun can generate the following revenue from different businesses:

• 91 basis points (bps) on launchpad bonding curve volume;
• 14 bps on PumpSwap volume;
• Approximately 58 bps on Terminal-referred volume, i.e., 100 bps interface fee minus trader rebates.

Applying these rates to the three scenarios, we get:

• Bear scenario: annualized revenue of $310 million;
• Base scenario: annualized revenue of $836 million;
• Bull scenario: annualized revenue of $2.5 billion;

If directly returning to January 2025 peak levels, the peak month alone would generate an annualized revenue run rate of approximately $3.4 billion. Since half of revenue is used to buy back PUMP, the corresponding annual buyback and burn amounts are:

• Bear scenario: $155 million;
• Base scenario: $418 million;
• Bull scenario: $1.24 billion;

Based on PUMP's current market cap of $1.93 billion, the corresponding buyback yields are as follows.

Based on the 231 days remaining until April 28, 2027 under the buyback contract, at current price levels, this buyback program would eliminate tokens equivalent to 5.1%, 13.7%, and 40.7% of current market cap, respectively.

Finally, we convert these figures into implied valuations. Somewhat counterintuitively, we believe we cannot use the same valuation multiple across scenarios. The reason is that PumpFun's market activity is itself influenced by token price reflexivity. Higher revenue scenarios also imply higher market attention, which drives valuation multiple expansion; conversely, lower activity compresses valuation multiples.

Therefore, we assign corresponding valuation multiples to each activity level:

• Bear scenario: 1.5–2.8x P/S, ranging from PUMP's own historical low valuation multiple to the current 2.8x;
• Base scenario: 3–5x P/S;
• Bull scenario: 5–10x P/S.

Combining the three scenarios, we value PUMP at $0.0108–$0.0205, equivalent to 2.3–4.4x the Sept. 9 price of $0.0047.

This is not simply taking a single cell from the valuation matrix, but rather a probability-weighted result across the three scenarios with 25% bear, 50% base, and 25% bull weights.

We believe if market activity recovers to the previous peak level, PUMP's price could reach $0.0299–$0.0598, or 6.4–12.9x the current price. In a bear scenario, if market sentiment deteriorates simultaneously, we assume PUMP's price returns to near June lows, i.e., $0.0011–$0.0019, corresponding to a 59%–76% drawdown from the current price.

Risks

Despite our overall optimism, several risks are worth noting. One previous market concern about PumpFun was that its revenue remained unusually stable during bear markets, raising questions about wash trading and whether PumpFun pays bots to encourage token launches.

We cannot access its internal accounting, which is itself a risk. However, Blockworks data has filtered for wash trading. As for whether traders receive additional compensation for launching and trading tokens, current activity data appears organic: in August, addresses that initiated over 100 launches earned $32.3 million, with 72% profitable; the top 100 traders by volume earned $14 million after fees.

However, a more pressing concern now is that PumpFun is gradually losing its previously established monopoly at the launchpad level.

Since July, launchpad fees have grown 4.4x, from $20.8 million in the first week of July to $92.4 million in the week ending Sept. 8. Meanwhile, Pons and STONK have both achieved rapid growth, with market caps of $677 million and $211 million, respectively. However, PUMP appears to be falling behind: PumpFun's share of fees generated by these three platforms has dropped to 32%, down from as high as 90% in the week ending Aug. 25.

PumpFun has experienced similar situations before—losing market share and then regaining it, but what is notable this time is that PumpFun's response speed is clearly slower.

First, regarding Pons, we believe PumpFun's mistake was not expanding to EVM in a timely manner. The logic at the time may have been that since the execution layer would eventually be abstracted away, end users would not perceive the underlying execution environment, making the execution layer itself unimportant, and Solana offered the best performance.

We believe this was a mistake. PumpFun underestimated the importance of the ecosystem itself as a narrative, especially on chains with strong distribution capabilities like Base and Robinhood Chain, where the potential for ecosystem tokens to receive listing support in the future can itself be a major selling point. PumpFun's own mobile app already routes over half of its volume to Robinhood Chain, but its launchpad remains on Solana. Meanwhile, PONS's market cap has surged from $83 million to $677 million.

Second, regarding STONK's introduction of a stock-meme coin hybrid model to Solana, we believe PumpFun's response was also too slow.

StonkFun launched on Aug. 3 and migrated issuance to Raydium LaunchLab on Sept. 6; PumpFun's response, Custom Pairs, was not launched until Sept. 9. In other words, PumpFun responded five weeks after StonkFun's launch, and three days after StonkFun's fee revenue exceeded $1 million per day. The market was clearly dissatisfied with this response, as PUMP's price fell about 10% after the announcement.

Our overall view of PumpFun is that it has a mature market position and has historically been able to "copy" competitors' models and then beat them through execution. But recent events have raised more doubts about whether this advantage can be sustained. Therefore, we believe the coming weeks and months will be critical, as the market observes how PumpFun addresses these challenges.

Finally, we want to reiterate the token holder alignment risk mentioned earlier. This risk remains real and is an important constraint on our holding of PUMP, especially for any holding period beyond April 2027. Even before that, the market may begin to price in the risk that the programmatic buyback program will not be extended. However, in the near term, we believe this risk can be partially offset by the possibility that the programmatic buyback program may be extended.

Conclusion

PumpFun's lack of transparency and token-business alignment, combined with it being one of the most profitable businesses in crypto, makes PUMP one of the most difficult tokens to value fundamentally.

We believe the market is wrong in two places: first, the market has over-amplified token alignment risk, while programmatic buybacks have at least covered this issue until April 2027; second, the market is pricing based on the overall meme coin index rather than PumpFun's own revenue—the latter has hit an all-time high in SOL terms.

Therefore, at the current 2.8x P/S valuation, we remain bullish on PUMP. What is truly worth watching next is PumpFun's response to Pons and StonkFun, which will be a key test of whether its launchpad market position can be maintained.