Can $Pump Achieve Its Trillion Dream?
——Also Discussing Its Buyback Plan
In an interview, PUMP's co-founder hinted at their ambition, stating, "PUMP is not just a MEME platform; it aims to be a TIKTOK+TWITCH+INS with mature assets, aspiring to become a trillion-dollar company."
However, this ambition has been widely criticized as that of a "team with no vision." Is it just a pipe dream, or have they truly misunderstood their own potential? Today, let's start with the buyback discussion.
Before reading further, consider this: how much have they claimed to have bought back to date? Later, we can compare their actual buybacks with expectations to see if they are high or low.
Now, let's begin the main text:
After the HYPE, people are very concerned about whether there will be buybacks, how much will be bought back, and for how long. However, I have a different understanding of the essence of buybacks.
- The Buyback Model of HYPE
For $HYPE, the main traders are large holders, and trading income primarily comes from steadily growing contract trading. Its goal is to serve these large holders, including improving infrastructure, providing brand reputation for long-term stable operations, and reducing operational costs.
At this point, since the platform's development and operational costs are stable, and the goal is not extensive promotion and operation (HYPE seems to have done little marketing), the way it uses its operating income reflects the company's uniqueness, similar to high-quality companies in traditional stock markets.
HYPE divides its income into two parts: one part is used for token buybacks, and the other part is paid to the market-making pool.
Many in the market-making pool are self-operated, thus sharing a portion of the platform's daily revenue.
The buyback portion increases the token's value. Considering that they hold the platform's tokens, buybacks allow their tokens and the community to enjoy the dividends of community development. Overall, this is a top-tier model with a grand vision, sharing development dividends with the community.
- Is Full Buyback the Mark of a Good Project?
Is it true that all projects should be like HYPE, using all their income for buybacks to be considered good projects? Definitely not.
Essentially, a project's ability to maintain rapid growth is paramount. This means first expanding the business and then considering profit-sharing—profit-sharing is likely to be considered only when the business model and revenue are solid and no longer require significant expenditures.
For example, companies like Tesla, Pinduoduo, and Xiaomi rarely distribute dividends or have no dividend plans because they have long-term goals, and everyone trusts that the project team will work harder than we do to achieve these goals. Therefore, we hope for no dividends, as there are many areas that require funding.
For instance, Pinduoduo has hundreds of billions on its balance sheet, which initially seemed like a lot, but suddenly national subsidies came, forcing them to initiate hundreds of billions in subsidies; merchants on Pinduoduo found survival difficult, and white-label merchants struggled to develop, so they had to spend money on massive merchant subsidies; when a tariff war arose, they preemptively adjusted their warehousing and logistics, stabilizing their position, and so on.
- Classification of Cryptocurrency Projects
Returning to cryptocurrency projects, they can be categorized into several types:
First category, 90% of projects
Projects with no revenue or low revenue, lacking a future, primarily relying on selling tokens for survival.
Second category, 9%
Projects with revenue and growth, but either the revenue growth is not high or they still rely on selling tokens, and they cannot provide much empowerment to the tokens, such as buybacks, which are insignificant, while operational costs may also be high.
Third category, 1%
$HYPE and $PUMP
Both have huge revenues, with PUMP's peak revenue higher than HYPE's, currently PUMP is nearly half of HYPE.
Both have a long-term stable user base. HYPE targets institutions and large holders, while PUMP targets the younger generation born after 2000.
PUMP's Ambition
HYPE has a solid foundation, focusing on infrastructure, with marketing and promotion not being priorities. It only needs to continuously strengthen its foundation, including on-chain ecosystems and stablecoins, all managed by third parties, focusing on building on-chain contracts.
PUMP's advantage lies in its vast number of young users, leading the cryptocurrency space, and it has a clear distinction from the HYPE team's direction.
HYPE aims to build infrastructure, aspiring to become the most powerful on-chain infrastructure in the blockchain field, monopolizing future on-chain transactions.
In contrast, PUMP aims to be a platform, benchmarking against INS+TIKTOK+Twitch—this represents a significant cognitive gap from the current perception of being merely a MEME platform. They are entering through tokens, firmly grasping the point of asset issuance, and are attempting to combine asset issuance with the lifestyle of the younger generation. The platform is expected to see a surge of creators and top influencers on PUMP, with their income likely reaching millions of dollars in a single day, rapidly gaining traction and explosive growth.
This is based on a dual judgment of social media and token economics—people cannot resist the temptation of "he's making money."
Currently, PUMP's live streaming has just begun, and there is still much for the team to do, including many operational opportunities, such as the recently popular BAGWORK, which has established a website at https://bagwork.org/
They are previewing their upcoming projects to attract attention while live streaming on PUMP, with a market value reaching 26 million. These stories will spread like a virus.
The PUMP team consists of young individuals in their early twenties, and their product capabilities and iteration abilities are impressive. What is even more astonishing is their ambition for the future. In an interview, they stated:
"We never intended to create a 'meme coin platform'; that was never the goal from the start. What we want to create is a platform where all content can be traded—short videos, live streams, YouTube-style video content, tweets, etc. (full interview linked at the end)."
They may fail, but they are also the team with the greatest chance of success in the cryptocurrency space—no matter how much one dislikes them, one cannot deny their product capabilities.
- Is It Bad for PUMP Not to Buy Back in the Future?
Given the PUMP team's product capabilities and ambitions, their previous decision to sell SOL for USDT may also reflect a long-term perspective, overlooking the short-term fluctuations of SOL, leaving enough funds for development (Lei Jun mentioned at the 2014 Second China Angel Investor Conference that he summarized the three most important points for entrepreneurship: huge market demand, a reliable team, and raising enough money during peak periods that cannot be spent).
Although in the WEB3 community, including myself, there was a period of disappointment with the team, as it seemed they were like 90% of the teams above, constantly selling tokens and then enjoying luxury yachts and models, believing they "earned so much yet disregarded the community."
However, based on their actions, the aforementioned criticism may be misguided because: the team has grown from 3 to 70 members; product updates are rapid; they have survived challenges from multiple competing platforms, solidifying their moat, etc. These do not resemble a team that "just wants to cash out after making enough money."
Yet, the community's criticism led the team to decide to start buybacks and publicly announced the buyback page, https://fees.pump.fun/
Currently, about $2 million in revenue is used daily for token buybacks, which, for the currently low market cap of PUMP tokens, has led to a continuous increase despite the criticism, as the fixed daily buyback of $2 million has a stable and strong impact on the current market cap. So far, they have bought back nearly $100 million in just a few months, which is a significant amount!
A common skepticism is that the team has not stated they will continue to buy back, especially given the distrust towards the team, which further leads to doubts about the project.
If they were to clarify buyback rules like HYPE, then PUMP's earnings would be half of HYPE's, and with a business model that is not inferior to HYPE's, the market cap could potentially reach half of HYPE's, which is nearly ten times the current market cap. However, I do not believe the team will or should buy back, but I also do not think that not buying back is a bad thing.
Because a $30 billion PUMP token does not seem to be the team's goal; their goal is to become INS+TIKTOK+Twitch, either succeeding or failing.
If successful, the market cap would certainly exceed $500 billion, becoming a top-tier project in the cryptocurrency space and the first major user-centric project in the blockchain field, creating a new track;
If they fail, for the team, a market cap of $30 billion and $3 billion are essentially no different— for wealthy individuals, $1 billion in cash and $10 billion in cash no longer bring any change in experience—at least that’s how I see it.
But for truly free individuals, what they often desire becomes: to accomplish something remarkable.
Huang Zheng chose to start Pinduoduo after achieving financial freedom; Lei Jun, looking at his cold $4 billion, felt he had achieved nothing and decided to found Xiaomi.
A well-known rider from Meituan: looking at the last $100 in his wallet, he decided to support PUMP's dream—just like supporting the dream of blockchain.
Note: I tend to be overly optimistic, eager to suffocate for dreams, because I firmly believe in the saying "pessimists are right, but optimists succeed." The above views may all be wrong, and I may once again be slapped in the face by reality and end up holding the tokens, but I am still willing to love once more.
Co-founder Interview:
PUMP Hits New High, Anonymous Co-founder Discusses the Reasons Behind It
https://www.theblockbeats.info/news/59616
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