A 10,000-Word Research Report Breaking Down PUMP: What Is a Reasonable Price?

Source: Blockworks Research; Original author: shaunda devens

Compiled by Odaily (@OdailyChina); Translator: Azuma (@azuma_eth)

Key Takeaways

• PumpFun has built one of the most profitable and most durable infrastructure businesses in crypto. It currently generates $677 million in annualized revenue, and among the top ten protocols by revenue, it has the lowest weekly revenue volatility. PumpFun's business consists of two parts: a deeply moat-protected infrastructure layer (the launchpad and DEX), and a fast-growing consumer layer targeting social trading. Since early July, its frontend trading volume has grown 5.6x.
• PUMP is one of the few highly liquid assets that offers direct exposure to meme coins and the consumer layer. It captures activity across the meme coin market broadly, while also exhibiting strong reflexivity, since its revenue is directly tied to token price appreciation — the correlation coefficient between PUMP's weekly price change and weekly revenue change is 0.35, ranking third among 46 revenue-generating tokens. Nevertheless, PUMP currently trades at just 2.8x P/S (price-to-sales), a clear discount relative to comparable assets. We believe it is one of the most mispriced assets in the current crypto market, for two main reasons.
• First, although token holder alignment risk remains, we believe the market is overweighting this risk in the short term. PumpFun directs 50% of revenue toward programmatic buybacks, which at current prices equates to absorbing roughly 17.6% of circulating supply annually. Meanwhile, roughly 77% of tokens already allocated to insiders have yet to move. The team reportedly holds approximately $2 billion in treasury assets, which means the team clearly recognizes that a rising token price can generate enormous attention and market effects relative to competitors without a token. We therefore expect insider selling to remain limited, creating favorable short-term flows on top of 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, because 96% of its revenue comes from tokens with a market cap below $1 million. If anything, this reflects PumpFun's own dominance: the launchpad has developed such strong market stickiness that flows have been dispersed across thousands of tokens. Current token issuance has reached its highest level since the January 2025 peak, the number of tokens completing graduation has hit an all-time high, and PumpFun's SOL-denominated revenue is also at an all-time high. As its business lines expand further, if the broader industry returns to January 2025 activity levels, PumpFun would generate approximately $280 million in monthly revenue, nearly double its monthly revenue at its historical peak.
• Our base case assumes market activity recovers to the monthly average since April 2024. August data alone already exceeds this level in terms of token issuance and curve trading volume, which implies PumpFun would reach $836 million in annualized revenue, corresponding to a 21.7% buyback yield. Combining the three scenarios, our valuation range for PUMP is $0.0108–$0.0205, equivalent to 2.3–4.4x the current price. In the bull case, PUMP's potential upside reaches 6.4–12.9x the current price; in the bear case, if market activity returns to June lows and valuation multiples also fall to historical lows, PUMP could face a 59%–76% drawdown.

PumpFun's Monopoly Position

In the coming bull market, we want to hold two types of tokens: businesses with reasonable valuations that generate revenue, and reflexive tokens that benefit from the high activity driven by speculation. PUMP happens to possess both attributes.

At the infrastructure level, PumpFun holds market leadership through its launchpad and DEX; at the same time, it continues to push for control of the frontend through Terminal and mobile. As such, PUMP is essentially a broad-coverage, highly liquid "picks and shovels" investment that directly benefits from speculative activity.

With near-monopoly control of the infrastructure layer, PumpFun currently processes 70% of Solana meme coin trading volume and roughly half of all-chain meme coin DEX trading volume. Despite the meme coin industry changing rapidly and being highly cyclical, PumpFun has not only maintained its dominance in the launchpad space, but also continues to capture DEX trading volume and expand into new verticals such as the consumer layer.

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

Although the market has consistently worried about the sustainability of its revenue, Pump's revenue base is actually more stable than that of other leading protocols: its weekly revenue volatility is just 29.7%, the lowest among the top ten protocols by revenue.

PumpFun's Infrastructure: Launchpad and DEX

PumpFun's business is underpinned by two core meme coin infrastructure components: the launchpad and the DEX.

The launchpad simplifies the token creation process while removing the requirement for projects to pre-provide liquidity for an AMM. Tokens initially trade through a bonding curve AMM with "virtual reserves"; as users continue to buy, real reserves gradually accumulate and, once the token completes "graduation," are used to fund a liquidity pool.

This liquidity pool is then created on PumpFun's own DEX — PumpSwap. In this way, PumpFun can continue to capture trading fees after a token enters the secondary market, rather than handing that revenue over to external trading platforms.

By packaging token creation and liquidity formation into a single product, PumpFun offers a clearly differentiated service and can charge substantial fees — the bonding curve trading fee is 125 basis points (125 bps), of which Pump retains 95 bps.

As the launchpad gradually becomes the default channel for meme coin issuance, its infrastructure has also become deeply embedded in consumer applications such as Axiom and Fomo. These applications funnel users into PumpFun's market, allowing PumpFun to benefit from trading activity across different frontends without having to bet its growth on whether any single application can retain users over time.

As a result, in a highly competitive industry where users and flows rotate quickly, PumpFun has established a relatively durable infrastructure advantage. Although frontend market leaders have changed multiple times, PumpFun still holds roughly 98% of Solana launchpad bonding curve trading volume.

Each new integration further strengthens PumpFun's distribution advantage: creators issuing tokens on PumpFun can directly reach the users of these integrated applications.

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

Of that, the launchpad contributed an annualized revenue run rate of $87.1 million, up 41% quarter-over-quarter; PumpSwap contributed $38.3 million, up 64% quarter-over-quarter. Meanwhile, PumpSwap's realized take rate also rose from 5 bps to 13.3 bps.

PumpFun's Consumer Layer

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

For an infrastructure company, this shift is significant in two ways: on one hand, it allows PumpFun to move into the consumer layer of the meme coin value chain — where PumpFun's fee revenue was previously leaking away; on the other hand, it can further entrench its position by directly owning end users, reducing dependence on third-party platforms, and continuously developing new features on that foundation.

PumpFun has already made multiple acquisitions, from acquiring Kolscan's wallet analytics business in July 2025 to acquiring Vyper's trade execution infrastructure… Today, its consumer business mainly revolves around two products, each targeting different stages of the token lifecycle and their respective competitors:

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

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

Compared with its expansion at the infrastructure layer, PumpFun's progress in the consumer layer is noticeably slower, because it means it must compete head-on with frontend platforms that have already established user advantages. Currently in mobile, PumpFun clearly trails Fomo; in trading terminals, it trails Axiom.

That said, we still believe there is upside in this area, for two main reasons. First, PumpFun's treasury funds allow it to compete aggressively through incentives, with Callout Rewards alone distributing about $1 million per day; second, because PumpFun can already monetize underlying trading volume through the launchpad and PumpSwap, it can undercut competitors on fees — PumpFun's mobile app currently charges no interface fee, while Fomo charges 0.5%.

Looking at the data, we believe this strategy is working: frontend daily trading volume for mobile and Terminal has grown 5.6x since early July. In the first week of this observation period, average daily volume was just $15 million; by the first week of September, it had risen to $84 million, peaking at $100 million on September 4. Over the same period, mobile daily active users grew from 5,600 to 34,100.

Although these businesses are intentionally kept free and unmonetized for now, to illustrate their potential commercial value, we modeled a fee rate of 50 basis points (50 bps) similar to Fomo. Based on last week's trading volume, mobile alone could contribute about $128 million in annual revenue, equivalent to a 24% incremental increase over PumpFun's current revenue.

Owning the frontend is also valuable for the consumer business, because it means PumpFun can not only monetize directly, but also expand further into related business areas.

Just as Kalshi and Polymarket leveraged their market positioning to expand into adjacent verticals, PumpFun may take a similar path in the future, further adding businesses such as perpetuals (perps) and prediction markets. In fact, PumpFun has already led a $1 million funding round for Pumpcade, which is moving into areas such as livestreaming and prediction markets.

PumpFun's Positioning

Taken together, 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, while also offering upside 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 also has strong thematic investment value: meme coins, like perpetuals, L1s, spot trading, stablecoins, and prediction markets, are core verticals in the crypto industry, and PUMP is one of the few assets offering highly liquid, pure meme coin exposure.

At a time when we believe meme coin trading volume is already at depressed levels, there is one more characteristic that makes PumpFun especially attractive: reflexivity.

PumpFun's business activity is highly correlated with speculation, so higher prices lead to higher market activity and more revenue, meaning the token price can rise quickly without relying on continuous multiple expansion. Instead, a reflexive loop gradually forms — price increases drive higher trading activity, higher activity brings revenue growth, which in turn further drives the token price higher.

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

Nevertheless, PUMP currently trades at just 2.8x price-to-sales, a clear discount relative to comparable tokens. Based on "outstanding tokens" and excluding the 240 billion community and ecosystem allocation, PUMP is valued at $2.77 billion.

We believe this discount mainly reflects two things: first, the market fundamentally misunderstands PumpFun's business; second, the market is concerned about alignment between PumpFun and token holders. The latter concern is legitimate, but we believe the market is overweighting this risk in the short 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 ultimately accrues to the PUMP token?

The Relationship Between Token and Equity

Even as PumpFun raised more than $1 billion, it has never been clear exactly how its massive revenue would flow to token holders. The widely circulated claim of a 25% revenue share 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 right to revenue, profits, dividends, distributions, or other cash flows of the company; at the same time, buyers of PUMP should not purchase PUMP in anticipation of economic returns through buybacks or the efforts of the Pump team.

One thing is clear: the $2 billion in treasury funds belongs to Baton Corp, not to PUMP token holders; but what is truly unclear is how important