Original text compiled by: Alex Liu, Foresight News
According to various media reports citing informed sources, pump.fun is preparing to sell 25% of PUMP tokens at a valuation of $4 billion to raise $1 billion. Is this price attractive? Sunny Shi from Messari has built a valuation model for PUMP, which shows that its FDV (Fully Diluted Valuation) could reach $7 billion. If the prediction is correct, buying PUMP tokens would mean making a profit. But there is one important prerequisite. Here is their valuation process (from Sunny Shi's perspective, "we" refers to Messari):
No matter how you view Memecoins, this sector continues to "print money." Although the trading volume on the pump.fun token issuance platform has decreased compared to the beginning of the year, it is still well above the levels for most of 2024.
The trading volume of Pump.fun is higher than most of the time in 2024, data: Messari
People may have also underestimated the success of PumpSwap. This DEX went live about three months ago but has already significantly eaten into Raydium's market share on Solana.
Comparison of market shares between PumpSwap and Raydium, data: Messari
Our valuation method uses a top-down model that assumes the overall trading volume of the cryptocurrency market, Solana's market share, launch platform share, and PumpSwap's market share. These assumptions and models are only available to enterprise clients, but I will share the main conclusions.
In our base case scenario, we believe that Memecoins will occupy a niche in the broader crypto economy, as they are more suited for speculative purposes than NFTs. Of course, the Solana ecosystem will undoubtedly diversify into new asset pairs as it matures, but this is also likely to be the case.
We believe that even though pump.fun's market share in the Solana ecosystem has slightly decreased, PumpSwap continues to grow, and the pump project is still expected to generate about $675 million in revenue over the next two years. Based on a 10x valuation multiple, the corresponding FDV is approximately $7 billion.
However, the key premise is: if the project chooses a non-transparent token/equity structure that allocates most of the income to insiders rather than to token holders, we believe the current market has become quite cautious and will not overlook this poor value accumulation method. In our full report, we provide valuation tables to assess the potential value of PUMP based on the percentage of income that token holders can receive.
Regardless of how the market ultimately judges, this is a great opportunity to participate in the most profitable crypto application in history. Now it depends on whether the project team provides enough participation value (buy-in) for token holders to make it a project worth investing in.
Editor's note: At this moment, the price of PUMP in Aevo's pre-market perpetual trading is 6 USD, corresponding to a fully diluted valuation (FDV) of 6 billion.
The pre-market price of PUMP on Aevo
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Messari: PUMP is reasonably valued at $7 billion. Is buying in the public sale guaranteed profit?
Original Title: A Valuation of $PUMP
Original author: Sunny Shi, Messari Crypto
Original text compiled by: Alex Liu, Foresight News
According to various media reports citing informed sources, pump.fun is preparing to sell 25% of PUMP tokens at a valuation of $4 billion to raise $1 billion. Is this price attractive? Sunny Shi from Messari has built a valuation model for PUMP, which shows that its FDV (Fully Diluted Valuation) could reach $7 billion. If the prediction is correct, buying PUMP tokens would mean making a profit. But there is one important prerequisite. Here is their valuation process (from Sunny Shi's perspective, "we" refers to Messari):
No matter how you view Memecoins, this sector continues to "print money." Although the trading volume on the pump.fun token issuance platform has decreased compared to the beginning of the year, it is still well above the levels for most of 2024.
The trading volume of Pump.fun is higher than most of the time in 2024, data: Messari
People may have also underestimated the success of PumpSwap. This DEX went live about three months ago but has already significantly eaten into Raydium's market share on Solana.
Comparison of market shares between PumpSwap and Raydium, data: Messari
Our valuation method uses a top-down model that assumes the overall trading volume of the cryptocurrency market, Solana's market share, launch platform share, and PumpSwap's market share. These assumptions and models are only available to enterprise clients, but I will share the main conclusions.
In our base case scenario, we believe that Memecoins will occupy a niche in the broader crypto economy, as they are more suited for speculative purposes than NFTs. Of course, the Solana ecosystem will undoubtedly diversify into new asset pairs as it matures, but this is also likely to be the case.
We believe that even though pump.fun's market share in the Solana ecosystem has slightly decreased, PumpSwap continues to grow, and the pump project is still expected to generate about $675 million in revenue over the next two years. Based on a 10x valuation multiple, the corresponding FDV is approximately $7 billion.
However, the key premise is: if the project chooses a non-transparent token/equity structure that allocates most of the income to insiders rather than to token holders, we believe the current market has become quite cautious and will not overlook this poor value accumulation method. In our full report, we provide valuation tables to assess the potential value of PUMP based on the percentage of income that token holders can receive.
Regardless of how the market ultimately judges, this is a great opportunity to participate in the most profitable crypto application in history. Now it depends on whether the project team provides enough participation value (buy-in) for token holders to make it a project worth investing in.
Editor's note: At this moment, the price of PUMP in Aevo's pre-market perpetual trading is 6 USD, corresponding to a fully diluted valuation (FDV) of 6 billion.
The pre-market price of PUMP on Aevo