Messari predicts: PUMP's reasonable valuation may be $7 billion. Is buying in the public sale guaranteed profit?

Written by: Sunny Shi, Messari Crypto

Compiled by: Alex Liu, Foresight News

According to various media outlets citing informed sources, pump.fun is preparing to sell 25% of its PUMP tokens at a valuation of $4 billion to raise $1 billion.

Is this price attractive?

Sunny Shi from Messari has built a valuation model for PUMP, which shows that its FDV (Fully Diluted Valuation) could reach 7 billion USD. If the prediction is correct, buying PUMP tokens would mean profit. However, there is one important premise. Here is their valuation process (from Sunny Shi's perspective, "we" refers to Messari):

No matter how you view Memecoins, this track is still continuously "printing money."

Although the trading volume of the pump.fun token issuance platform has decreased compared to the beginning of the year, it is still well above the levels for most of 2024.

The trading volume of Pump.fun is higher than most of the time in 2024, data: Messari

People may have underestimated the success of PumpSwap. This DEX launched about three months ago, but it has already significantly eaten into Raydium's market share on Solana.

Comparison of market share between PumpSwap and Raydium, data: Messari

Our valuation method adopts a top-down model, assuming the overall trading volume of the crypto market, Solana's share, the share of launch platforms, and the market share of PumpSwap. These assumptions and models are only available to corporate clients, but I will share the main conclusions.

In our base case, we believe that Memecoins will occupy a niche in the broader crypto economy, as they are more suitable for speculative purposes than NFTs.

Of course, the Solana ecosystem will undoubtedly diversify into new asset pairs as it matures, but this is also very likely to be the case.

We believe that even though pump.fun's share in the Solana ecosystem has slightly decreased, PumpSwap continues to grow, and the pump project is still expected to generate around $675 million in revenue over the next two years.

Based on a 10x valuation multiple, the corresponding FDV is approximately $7 billion.

However, the key premise is: if the project party chooses a non-transparent token / equity structure that allocates most of the income to insiders rather than to token holders, we believe the current market has become quite cautious and will not overlook this poor value accumulation method.

In our comprehensive report, we provide a valuation table to assess the potential value of PUMP based on the percentage of income that token holders can obtain.

Regardless of how the market ultimately judges, this is an excellent opportunity to participate in the most profitable crypto application in history. Now it depends on whether the project team provides token holders with sufficient buy-in value, making it a project worth investing in.

Editor's Note:

In the pre-market perpetual trading market of Aevo, the current price of PUMP is $6, corresponding to an FDV (Fully Diluted Valuation) of 6 billion.

The pre-market price of PUMP on Aevo