What is Pump.fun and Why is it Banned in the UK?
In recent weeks a platform by the name Pump.fun has been all over the news. But what is this platform? And what does it do exactly?
We will dive into all the details, and controversy, surrounding the Pump.fun platform. Keep reading to find out more.
What is Pump.fun?
Pump.fun is a decentralized memecoin-generating platform that allows anyone to create and subsequently trade their very own memecoin. The platform is built on the Solana blockchain and to date has over 50,000 active users.
All users have to do is visit the platform, create an account, put in a few details, and within minutes they have a memecoin that can be traded on multiple platforms. The platform is notoriously low-cost, easy to use, and fast.
Tokens created on Pump.fun are personalized to suit their creators’ tastes. Additionally, they can chat with other users of the platform, creating a truly social experience.
How Does Pump.fun Work?
Pump.fun is built upon the Solana blockchain, but it doesn’t require any technical knowledge to be able to be used. It relies on the proof-of-stake and the proof-of-history consensus mechanisms in other to process transactions. Currently, Solana can process a massive 65,000 transactions per second—far beating its rival, Ethereum.
This large number of transactions is possible thanks to a parallel infrastructure that allows the blockchain to process several transactions in quick succession. In addition, Pump.fun has the privilege of relying on Solana’s Gulf Stream protocol, which forwards transactions prior to publication—further boosting its speed across its network of 1,800 validators.
The transaction fees of Pump.fun do change based on the traffic of the website, but in general, it costs only about $0.00025 per transaction—one of the lowest fees in the cryptocurrency industry.
As far as security measures go, Pump.fun relies on the Byzantine Fault Tolerance to protect against fraud on the blockchain.
Who Created Pump.fun?
Pump.fun was created by an anonymous individual who goes by the name of Alon. Alon is still involved in the project, however, he considers the project a democratic one—meaning the individuals who use the website get to vote on its future.
Is Pump.fun Legal?
Pump.fun, although it is fun, is causing issues in the regulatory world. Any memecoins created on the Pump.fun platforms are immediately available for exchange on any Solana-based exchange—even if they don’t have much liquidity.
Plus, remember that anyone can make a token—there are no identity checks to ensure the individual isn’t a criminal. There are also currently no checks in place to ensure a token created isn’t a scam—as such, it can be dangerous to interact and back memecoins on the site.
As such, there are several governments that look down upon Pump.fun in disdain. One of them is the UK, which recently issued a missive labeling the website as an illegal operator. In the days since, access to the Pump.fun website has been geo-locked to ensure those in the UK are unable to do so.
Should You Use Pump.fun?
Pump.fun sure looks like an easy way to make a memecoin, and if that is what you are going for, you will likely enjoy your time using the site. That being said, we recommend proceeding with caution.
Although Pump.fun is currently legal in many countries, we aren’t sure if that will remain the case. Remember, anyone can use Pump.fun to create a token and although we assume the majority of users have the right idea in mind, we know the site also has malicious actors who are just waiting to scam individuals of their money. In fact, one of the major complaints about the site is the number of rug-pull schemes that users have become victims of.
Pump.fun is also, most notably, a closed-source platform. This means they do not share their source code with anyone, and there are no third-party audits. Even though closed source code has its benefits, it also means that the safety of the platform cannot be verified by experts.
To make matters worse, the security structure of the site is currently lacking and has been complained about by professionals. While Pump.fun does have upgrades planned that will address these issues, they aren’t in place yet—meaning there is a chance the site (or your memecoin) could be targeted.
So, that being said, we do not recommend investing in any tokens on Pump.fun unless you know and trust the creator.
**We would also like to highlight that there have been recent misuses of the platform’s live-streaming feature. Although this feature was created to help boost tokens and find investors, it has recently been used to perpetuate child abuse and bestiality. As such the livestream feature was disabled on November 24th, 2024, until the creators can find a way to keep it safe from abuse.
Popular Memecoins Created on Pump.fun
Even if you are just hearing about Pump.fun for the first time, it is likely you have come across at least one of the memecoins made on the site. While they don’t all make it big, there are a few that have. Below, we have listed the most popular Pump.fun memecoins.
· Peanut the Squirrel (PNUT)
· Goatseus Maximus (GOAT)
· Just a Chill Guy (CHILLGUY)
What Do You Need to Get Started on Pump.fun?
Getting started on your own memecoin on Pump.fun is easy—all you need is a Solana-compatible wallet. Then, just create an account, link your wallet, and start building! (Make sure you have enough SOL to pay for it!)
Are There Alternatives to Pump.fun?
There are several other platforms that have similar features to Pump.fun. The most famous is Sunpump though it should be approached with the same caution as Pump.fun.
Remember, while it can be fun to create your own memecoin, not all of the individuals on this site are trustworthy. Never purchase memecoins you are unsure of—and if you do find a project to invest in, only invest money you fully intend to lose.
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