Pump's Token Buyback Price Surges Above Market

Pump.fun has ramped up its buybacks of the native PUMP token following an initial coin offering last month that raised approximately $600 million. Currently, the average repurchase price is over 40% higher than the market price, even as revenues decline. On Tuesday, the Solana memecoin launchpad executed one of its largest single-day purchases, acquiring $11.65 million in PUMP tokens, according to aDune analytics dashboard created by the analyst @adam_tehc on X. Estimates suggest that the team has repurchased roughly 7.43 billion PUMP tokens at an average price of $0.0058, amounting to around $43.38 million spent to date. This average price significantly exceeds the current market price of $0.0039, indicating a notable disparity between buyback prices and on-the-spot trading rates. The token's value has dropped by 42% from its peak of over $0.0068, reached shortly after the mid-July launch. Additionally, a report from Lookonchain referenced ongoing purchases amounting to 175.3 million PUMP tokens, valued at nearly $705,000 in the past few hours, bringing cumulative buybacks to 7.66 billion PUMP tokens worth about $30.65 million, or 0.766% of the overall supply. This variation in reported figures may arise from different methodologies employed by various tracking tools. Notably, the official Pump.fundashboard indicates total buybacks of $34.4 billion as of August 12. Pump.fun initiated its buyback program in July, leveraging fees from the platform. The move came amid stiff competition among Solana memecoin platforms and discussions about the capability of fee-driven buybacks to compensate for a downturn in user activities. Rival launchpad LetsBONK surpassed Pump.fun in terms of daily volume and token launches several times in July; however, Pump.fun regained its leading position earlier this month, although activity has remained inconsistent into August, per data from The Block. Daily revenue has been on a downward trend since peaks recorded in January, despite the introduction of PumpSwap and the ICO. Disclaimer: The Block is an independent media outlet that provides news, research, and data. As of November 2023, Foresight Ventures is a majority stakeholder in The Block, which continues to operate independently to deliver credible, relevant, and timely information regarding the cryptocurrency landscape.