Pump.fun is a Solana-based marketplace that allows users to easily create and distribute their own tokens, most commonly "memecoins," or tokens without an intrinsic value proposition beyond their novelty and community value.

Multiple celebrities have used Pump.fun to launch their own memecoins, although most of them have struggled to find sustainable price action.

Furthermore, Pump.fun has some built-in safeguards to dissuade dishonest behavior, like secretly reserving tokens for early adopters or selling tokens early at a discount. 

How can I trade memecoins on Pump.fun?

Pump.fun's homepage provides a grid of recently-created memecoins launched by other Pump.fun users. If you spot a token that you're interested in buying, you can connect a Solana SOL +0.084% -capable crypto wallet to the site by clicking the button in the top-right of the screen. Popular wallets that support Solana include Metamask, Phantom, WalletConnect, Solflare, and many more. 

Clicking on a specific token takes you to a page with additional information including a price chart for the token, comments left by other users, a list of recent trades, and an interface for buying or selling the token. 

Token sales work on a bonding curve rather than a traditional order book, meaning increased demand in a token increases that token's price along a curve, which can reward early buyers. If a token manages to amass a market cap of $69,000, it is then listed on the Solana-based decentralized exchange Raydium, with $12,000 worth of the token deposited on the exchange and then burned.

The platform profits through a 1% fee on swaps and a 2 sol bonus whenever a token makes it to Raydium. The platform has nabbed hundreds of thousands of dollars in fees per day throughout much of its operation, according to The Block's data dashboard. 

There are many risks involved with buying such tokens as liquidity is often low and token prices may fall very suddenly at any point.

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How can I create my own memecoin on Pump.fun?

Creating a coin is as simple as coming up with an attention-grabbing name and an eye-catching image and clicking the "start a new coin" button at the top of the homepage. Users can write a short description of the coin, as well as linking relevant social media channels, before paying 0.02 sol (currently about $3) to deploy their new memecoin. 

If the user is completely new to crypto, they'll have to first fund their wallet with a small amount of Solana tokens purchased from an exchange like Binance or Coinbase. 

And that's it — Pump.fun's pitch is all about the simplicity and low cost to deploy new memecoins. 

Is Pump.fun safe?

Recently, Pump.fun was exploited for nearly $2 million by a former employee, who said he was arrested and released on bail in the United Kingdom following the theft.

Pump.fun is also closed-source and has closed APIs, which means its code is less visible to would-be attackers, but also that it cannot benefit from independent code auditors looking through its code for vulnerabilities. 

While Pump.fun promises that each memecoin has a fair launch, due to its restrictions on presales and insider allocations, it's still possible for team members to buy up large quantities of the token early on in its launch with the intention of selling the tokens once later users join. Trading memecoins is akin to gambling, so users should only risk an amount of money they'd be comfortable with speculating on memecoins.