PUMP, the native token of Solana-based memecoin launchpad Pump.enjoyable, has skilled a major value increase following its first-ever token buyback.
On July 16, blockchain analyst Ember CN reported that Pump.enjoyable spent 111,953 SOL, value $18.34 million, to repurchase 3.04 billion PUMP tokens at a median value of $0.006.
In accordance with Ember CN, the SOL used for the buyback originated from the platform’s charge wallets, which totaled 187,770 SOL, valued at $30.59 million. After the buyback, Pump.enjoyable nonetheless holds 69,420 SOL, value $11.48 million, leaving room for additional buybacks sooner or later.
This transfer represents a shift from the platform’s earlier method of transferring charge income to Kraken on the market. Over the previous yr, Pump.enjoyable has offered over $700 million value of SOL on the open market.
As an alternative, the platform now opts to make use of these funds for token buybacks.
Following information of the buyback, CoinMarketCap’s information revealed a 20% value rally that pushed PUMP’s worth to roughly $0.006782 as of press time. This raised the token’s absolutely diluted valuation to $6.3 billion, which makes the asset extra useful than Ethereum layer-2 networks like Optimism and Arbitrum.
Remarkably, the token can be among the many prime 20 digital belongings by buying and selling quantity within the final 24 hours.
Valuation considerations
Regardless of the spectacular efficiency of the token, market considerations about its long-term worth have begun to emerge.
In a latest report, BitMart Analysis raised considerations in regards to the token’s lack of inherent utility.
The report identified that PUMP provides no governance rights, profit-sharing mechanisms, or charge returns, that means its worth primarily is dependent upon model hype, an unreliable driver for long-term token efficiency.
In accordance with the agency:
“The token lacks actual utility or governance rights, and concern the launch is extra of a liquidity exit than a long-term plan. The group’s historical past of promoting platform charges as a substitute of supporting the neighborhood has solely deepened considerations.”
Furthermore, BitMart famous that Pump.enjoyable’s dominance is being challenged by rising platforms similar to letsbonk.enjoyable.
Whereas BitMart conceded that the BONK token additionally avoids providing governance or possession, the agency famous that rival token fashions embody built-in liquidity and deflationary mechanisms, which create market depth and value assist.
Contemplating this, the analysis agency concluded:
“The way forward for PUMP is dependent upon whether or not the group can construct a stronger token worth and regain market belief after the preliminary stress.”