Memecoin launchpads have gained significant traction in the crypto market, especially with the recent surge in the popularity of SunPump. Alongside Pump.fun, these platforms are emerging as leaders in the memecoin launchpad space. We took a closer look at both projects, their mechanisms, and market performance to make a comprehensive comparison. Here is the short summary:
Why Are Launchpads So Important for Memecoins?
Memecoin launchpads provide tools for fast and easy issuance of new memecoins, simplifying the entire process for individuals without technical expertise. These platforms are crucial for the memecoin ecosystem as they lower the barriers for token creation and trading, while also providing essential liquidity through bonding curve models that adjust token prices based on demand.
Solana vs. Tron: Ecosystems Clash
This year has been marked by fierce competition between Tron and Solana for the leading role in the memecoin market.
Launched in early 2024 on Solana, Pump.fun quickly reshaped the entire memecoin landscape. At some point in May, 83% of all the tokens created on Solana were issued using Pump.fun, with daily average revenue exceeding $1 million.
To challenge Pump.fun’s dominance, Tron’s creator Justin Sun backed the SunPump launchpad on Tron, which went live a few months after its rival, in August. Within two weeks of the launch, SunPump managed to surpass Pump.fun in daily activity and revenue; however, Pump.fun retook first place shortly afterwards.
Bonding Curve Mechanism Explained
One important mechanism driving memecoin launchpads is a bonding curve model, employed by both Pump.fun and SunPump. Its purpose is to maintain liquidity and market-based pricing of memecoins.
The bonding curve model ensures that, as more people buy into a new memecoin, the token’s price increases along a predefined curve. Once the market cap reaches $69,000, $12,000 worth of liquidity is deposited into decentralised exchanges (DEXs) like Raydium Protocol (for Pump.fun) or SunSwap (for SunPump) and then get burnt.
DEX Conversion Rates
One of the critical measures of success for any memecoin platform is its DEX conversion rate—the percentage of total tokens that successfully convert into tradable assets on decentralised exchanges. Both Pump.fun and SunPump have struggled with relatively low conversion rates: 1.4% and 2.1%, respectively.
Although these figures may seem modest, they highlight the broader challenge within the memecoin launchpad ecosystem: while it is easy for creators to launch memecoins, fostering a thriving community and securing a DEX listing remains daunting tasks.
Deployed Tokens and Revenue
The total number of tokens created on the platforms, as well as their dynamics, is a vital metric and an indicator of user engagement. In the mere months following its launch, Pump.fun achieved impressive numbers, with 1.9 million tokens deployed and $105 million generated in revenue (go to this Dune Analytics dashboard for up-to-date numbers). SunPump, despite its recent entry, is catching up to Pump.fun at an impressive pace:
Creation Fees
Fees collected by launchpads are a critical competitive advantage of one protocol over another. Initially, Pump.fun charged creators a fee of approximately $2.60 (0.02 SOL) to launch a memecoin, which was mirrored by SunPump upon its launch. However, in a strategic move, Pump.fun eliminated creation fees (along with introducing a 0.5 SOL reward for a creator if their token completes the bonding curve) on the same day SunPump launched. Instead, this fee is now paid by the first buyer.
Memecoin Launchpad Market Expansion
The memecoin launchpad market is becoming more crowded, with several other notable players entering the space. Platforms like Jupiter Exchange LFG, Game.com, Ethervista, We.Rich, and Ticket.Fans have all made strides in creating their own unique memecoin launchpad ecosystems.
Multi-Chain Memecoin Launchpads
Apart from Solana and Tron, other blockchains like Ethereum, TON, Base, and BNB Chain are also becoming home to memecoin launchpads. The future of this space could lie in multi-chain platforms, which allow creators and traders to operate across different blockchains, accessing a broader audience and liquidity.
Overall
As memecoin launchpads continue to grow, Pump.fun and SunPump are leading the charge with their innovative models and strong community support. While Pump.fun has a head start, SunPump is rapidly catching up, and the broader market is becoming more competitive by the day. If you happen to build in the same space and would like to contact DWF Ventures, feel free to reach out.
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