Pump.fun is a cup of poison, but everyone can't help but take a sip

Author: Haotian

I wonder if anyone has thought about what the "original sin" is that has caused this wave of corpses on the chain? The answer is something everyone knows is toxic, yet still takes a sip of: the Pump-style MEME asset issuance method.

Initially, the Pump-style internal and external market launch model allowed many small investors to achieve a higher probability of investment returns through sitting idle and trial and error. Coupled with the market sentiment FOMO effect that exists after breaking into the external market, the Pump asset issuance method once became mainstream.

However, success and failure both stem from Pump. The essence of the Pump asset issuance method is:

1) It is a short-term industrialized mass production of tokens. This method of token issuance focuses on standardized operations, low barriers to entry, and rapid mass production. This leads to most projects issuing tokens without a complete project plan, let alone any discussion of technological innovation and product implementation, focusing solely on mass production. If a token fails, it is simply produced again.

As this continues, the "project parties" issuing tokens become the absolute upstream of the liquidity harvesting assembly line, while the investors at the downstream become "chips," forever trapped in a bizarre cycle of losing on everything they buy and making mistakes on everything they do.

2) It is a deconstruction of the past "technical narrative." In the previous two cycles, there were some MEME tokens that had no real significance, but the mainstream market still revered the technical narrative of decentralization. From the pursuit of high TPS performance wars in layer 1 to the construction of rollup public chains in layer 2 aimed at expansion, and then to the iteration of technical narratives such as modularization, account abstraction, chain abstraction, staking, and restaking.

Although in the end, the application landing was too weak, these narratives had a considerable market competition and digestion cycle, and technological innovation, team strength, operational accumulation, etc., would all become value assessment indicators in the process. Meanwhile, activities like grabbing airdrops, contributing to the Grant ecosystem, and horizontal and vertical project cooperation were sufficient, aligning with the value preference of long-termism and building.

However, after the Pump, the nihilism of MEME-izing everything completely changed the industry ecology. Market participants no longer believed in the power of technological innovation, nor did they pursue the long-term PVE growth concept, but instead became trapped in a zero-sum game of short-term interests, destroying the technological innovation value system that the crypto world relied on.

3) It is an excessive reliance on attention FOMO economics. Originally, the vertical narratives of Crypto had different communities, with each track having a certain amount of capital and users. However, when projects experience explosive growth, users' attention becomes severely torn and dispersed, and almost everyone's cognition and decision-making eventually abstract into: When CA, mindlessly rushing in.

This leads to attention hype becoming the core focus, while conspiracy groups skilled at manipulating information asymmetry become the behind-the-scenes puppeteers. Over time, most users in the market are forced to lose their holder mentality and become small investors sitting idle, engaging in a battle of wits with the market makers, living off their youth; while the project parties have to bear enormous selling pressure from the start of TGE, creating a vicious cycle where TGE becomes the peak. Alas.

How to break the deadlock? To put it simply, there is actually only one way: embrace VC institutions entering the market to support early-stage innovative technologies; attract innovative regular army teams to create real value; linearly release tokens to extend the project's survival cycle; cultivate a community with a long-termism mindset, etc.

It sounds simple, but it is not easy to promote; the market needs a long period of natural evolution.

As I mentioned at the beginning, Pump is toxic, but most people are actually unwilling to admit its toxicity and can't help but take a sip, because it captures human greed, speculation, and profit-seeking.