Pump.fun Faces Backlash Ahead of $PUMP ICO as Team Allocation and Market Decline Spark Concerns

Pumpfun has officially announced the details of its upcoming initial coin offering (ICO) for the PUMP token, set to launch on July 12, 2025. The ICO, valued at $4 billion, will see 33% of the total 1 trillion token supply offered to the public and institutional investors, raising significant interest—and concern—within the crypto community.

Token Allocation Breakdown

The tokenomics reveal a detailed distribution plan: 33% (330 billion tokens) will be sold during the ICO, split between 15% for retail investors and 18% for institutional participants, potentially raising up to $1.3 billion at $0.004 per token.

An additional 24% is allocated for community and ecosystem initiatives, 20% for the team, 13% for early investors, with the remaining portion designated for a foundation (2%), livestream incentives (3%), and liquidity (2.6%). Notably, the tokens will be fully unlocked from day one, a move that has raised eyebrows regarding potential sell-off risks.

The ICO will be accessible via six major exchanges—Kraken, KuCoin, Bitget, Bybit, Gate, and MEXC—though U.S., U.K., and EU residents are excluded due to regulatory constraints.

Community Reaction: Widespread Criticism

Users across regions have expressed low trust in Pumpfun’s team, especially in light of the token allocation model disclosed for the ICO.

@watchingmarkets succinctly summarized this sentiment, stating, "Nearly 75% of the tokens are allocated to the team, disguised under various labels to give the illusion of fair distribution." This critique has resonated widely, amplifying concerns about the fairness and sustainability of the project.

An edited image mocking the Pump.fun team has circulated online:

Founding Partner of IOSGVC, Jocy, provided a structured breakdown of concerns:

• Past Success: Since its launch in early 2024, Pumpfun has generated approximately $7 billion in protocol revenue, making it one of the most profitable startups in the crypto space.

• Current Decline: The narrative is fading, with data showing a 92% drop in daily revenue from a peak of over $7 million on January 23, 2025, to approximately $500,000 recently. The market capitalization of related graduation projects has plummeted from millions to a mere $5,000–$10,000, and competitors like LetsBonk have overtaken Pumpfun, holding a 51% market share compared to Pumpfun’s 39.9%.

• Lack of Transparency in Governance and Token Unlocking: The project’s decision-making process is opaque, with no clear insight into how key choices are made. More critically, there’s no disclosed vesting or lock-up schedule for the team and investors — a major red flag that raises concerns about insider sell-offs post-launch, leaving public investors to bear most of the risk.

• Overvalued Fundraising: Raising funds at a $4 billion valuation during a downtrend in the altcoin market severely overprices the project and prematurely exhausts its future growth potential.

• Team Motives: Jocy argues the team lacks the willingness or ability to "pull the market" or "control the market," suggesting the ICO serves as an "exit liquidity" strategy. With nearly $2 billion already amassed from fees and sales, the team may prioritize cashing out over long-term stability.

• Investment Advice: Jocy concludes, "This is a high-risk gamble, not a sound investment," advising investors to wait a week post-launch to assess market reaction.

Other Key Voices in the Discussion

• @BroLeonAus expressed cautious optimism, noting Pumpfun’s real user demand and revenue. Additionally, Binance’s launch of pre-market futures for $PUMP drew sarcastic praise from @BroLeonAus, criticized it “the biggest innovation of this cycle” — a move that lets investors start gambling even earlier. With both pre-market and live trading contracts now available, he noted that the hype around $PUMP is so intense that Binance is likely to rake in substantial revenue from the overwhelming attention and speculative fervor surrounding the token.

• Crypto analyst @Geight16 advised against participating in the ICO, citing the Pumpfun team’s small-minded approach and history of selling SOL, which has suppressed its price. He predicted a modest 20-30% gain at best or a potential break-even scenario, warning of sell-offs by early investors and a lack of significant market protection. "I don’t believe the team will invest much to stabilize the price," he noted, suggesting a wait-and-see approach.

• @watchingmarkets also added his criticism of the team, accusing them of fabricating value out of nothing to extract money from investors.