98% of Tokens on Pump.fun Are a Scam, Solidus Labs Reveals

Pump.fun, a popular platform on the Solana network that allows users to easily create tokens, is now in the spotlight after a report from Solidus Labs revealed that 98.6% of tokens issued on the platform were either fraudulent or involved in fraudulent trading activities.

Only 1.4% of Tokens Have Real Liquidity

Since its launch in January 2024, Pump.fun has issued over 7 million tokens.

However, only around 97,000 tokens maintain liquidity of at least US$1,000, meaning less than 1.4% of the total tokens have real value in the market.

MToken Fraud Case Costs Investors Up to US$1.9 Million

One of the biggest fraud cases identified was MToken, which caused investors up to US$1.9 million in losses.

The modus operandi used included a “soft rug pull,” where developers slowly withdraw liquidity from the pool, leaving investors with worthless tokens.

Vitalik Buterin Criticizes Platforms Like Pump.fun

Ethereum co-founder Vitalik Buterin has also criticized platforms like Pump.fun for promoting speculation and harmful practices in the crypto ecosystem.

He highlighted that differences in developer goals and beliefs can affect the impact of applications on users.

Raydium Also Affected by Fraud

In addition to Pump.fun, Solidus Labs also found that 93% of the 361,000 liquidity pools on Raydium, a major decentralized exchange (DEX) on Solana, showed signs of a “soft rug pull,” resulting in major losses for investors.

Solana Becomes a Top Target for Bad Actors

The speed and low transaction fees on the Solana network attract bad actors, making it the second-largest blockchain for criminal transactions after Ethereum.

This highlights the need for stricter oversight and regulation in the crypto ecosystem.

The report serves as a warning to crypto investors to be more careful in choosing platforms and tokens to invest in.

Always do thorough research and be aware of the signs of fraud before investing.