The total number of Solana tokens in supply has tanked following several failed launches on pump.fun. Due to the many failed launches on the platform, developers have created a SOL sinkhole that holds deposits. The pump.fun bonding curve acts as a tool that locks up the tokens. The tool holds about 98% of the tokens in the bonding curve stage alongside the SOL deposits.
The bonding curve ensures that most tokens move to Raydium, thereby moving all liquidity to the decentralized exchange. However, the meme coins that end up as rug pulls do not make it, putting the deposited tools in the developer’s control. Meanwhile, other tokens that fail to achieve the set marker cap quota remain stuck and cannot leave the bonding curve stage. Although some trading might be on at this stage, the SOL remains inactive and attached to unknown tokens.
SOL tokens in the bonding curve decreases its market supply
Pump.fun has aided the launch of more than four million tokens, with thousands launched every day as of November 29. Each token has a quota of SOL that is deposited on the platform till it fulfills the criteria to be moved to Raydium. Although pump.fun is the platform that produces the most tokens, with reports putting it at 70%, other tools, and projects are used to create the remaining 30%.
According to records, stalled tokens associated with bonding curve activities are about $3,471 per token. The tokens may still face other issues related to raising liquidity due to axed livestream features. Users and market participants have been complaining about the way the feature was being used to carry out illegal activities. However, most tokens locked in the bonding curves are from bots, creators, and users trying to snipe assets.
Also, other tokens are traded within the bonding curve stage, albeit with lesser liquidity than they need. According to reports, there are about 58 million SOL locked in the stage, compared to the total 474 million tokens in supply. Another estimation also revealed a bigger amount of SOL locked in the he stage. Currently, there are about 162,789 SOLs locked in the stage.
One reason is that most tokens at the stage have lower value, with the tokens drawing the most SOL having a realistic chance of leaving the platform. Even if the SOLs are extracted from the meme pairs, pump.fun remains a sinkhole for tokens that cannot be found on other chains. It will make the SOLs valuable, giving users no reason to sell. Another concern is that SOL is made at a 5% inflation rate from validator rewards. However, he locked SOL in memes and DeFi is used to offset it.
Raydium ranks up in locked value
Solana has about 23% of its supply from the planned inflation rate. With about 91% locked, the price will show no significant selling pressure at that rate. The only question is the sustainability level of both new and already created meme tokens.
Meanwhile, Raydium has ranked up in terms of value locked on the decentralized exchange. The tokens launched on the platform contributed greatly to the feat, despite only a small crop making it there. The liquidity pairs on the DEX rose to $2.3 billion, adding to the daily turnover.
Using its lending and DEX protocol’s metric, the total value locked on Solana is now about $9 billion. Although pump.fun has yet to reach such numbers, it has seen a significant amount of SOL from the meme market. According to the metric from November, Solana, Raydium, and Jito contribute in the top 5 in fee production. In contrast, the group has surpassed Ethereum, which has sunk to 20th.
Solana is also trading close to its all-time high at $240, with analysts crediting the price surge to demand. Bot activity has also increased on Solana since September, with the platform contributing about 87% of bot traffic. The figure is also up from the 50% level in October.