Starting May 21st, Pump.fun, the Solana ecosystem token issuance platform, will enable USDC pairing for newly listed tokens. Previously, the platform primarily relied on SOL as the pairing asset. This adjustment means that the trading and liquidity structure of new projects will change, but existing SOL trading pairs will not be affected.
The new token will be paired with USDC.
Pump.fun notified network developers of this update as early as May 7th. Under the current arrangement, only newly issued tokens will be switched to USDC pairings; existing SOL pairing pools will remain.
Opinions within the community are divided regarding this adjustment. Some users believe that the platform's shift to stablecoin pairings is too late; others argue that USDC, as a pricing asset, has lower volatility, which will make the trading price of new coins more stable and make it easier for project teams and traders to manage their positions.
For Pump.fun, this is not just a change in the front-end trading experience, but also a transformation of the platform's revenue structure. Previously, a large portion of the platform's transaction fees were held in the form of SOL, which often needed to be converted into stablecoins to generate a stable cash flow. With the new mechanism, the relevant cash flow will be more directly denominated in stablecoins.
SOL lock-up mechanism may be affected
The reason this adjustment has attracted attention is that it may change the supply and demand relationship of SOL. In the past, after the token completed the bonding curve phase on Pump.fun, it would migrate to its AMM platform PumpSwap and form a liquidity pool with SOL, and the related liquidity would be permanently burned.
According to DefiLlama's estimates, since its launch in January 2024, this mechanism has kept at least 5.07 million SOL tokens in liquidity pools, worth over $430 million according to the article. This figure does not include the larger liquidity pools formed by some large-cap tokens.
Therefore, market opinions on the new mechanism are divided: supporters believe that the selling pressure on SOL on the platform may decrease after switching to USDC; opponents believe that if the new token no longer continuously consumes SOL as the pairing asset, the lock-up effect of SOL that relied on platform growth in the past will also weaken.
PUMP's share buyback volume remains among the highest.
In addition to changes in paired assets, the article also mentions Pump.fun's current buyback situation. Three weeks ago, the platform burned 123 billion PUMP and announced a significant reduction in the size of its buyback program.
Despite a 50% decrease in revenue flowing to PUMP, the platform's buyback activity remains significantly higher than other protocols in the Solana ecosystem. The article states that Pump.fun's buyback volume is still over 463% higher than other protocols, with weekly buybacks exceeding $4 million.
On-chain data shows that over $382 million has been used to buy back PUMP, representing approximately 37.9% of the circulating supply, corresponding to a decrease in total supply of about 13.4%. Platform co-founder Alon previously stated that retaining half of the protocol's revenue is to support the continued expansion of applications and reinvestment in the ecosystem.
