A new lending platform is set to debut, allowing users to purchase memecoins and non-fungible tokens (NFTs) using borrowed cryptocurrency, as announced by a Solana-based memecoin launchpad.
Referred to as Pump.Fi, this on-chain lending protocol aims to provide “immediate… financing for [any] digital asset,” according to an update shared on April 1.
As outlined, borrowers will be required to pay one-third of the total amount upfront and can settle the remaining balance over a period of 60 days. Additionally, Pump.Fi will establish a marketplace enabling lenders to acquire debt. However, the protocol has not clarified how it intends to guarantee repayment for its undercollateralized on-chain loans, given that it does not conduct credit checks.
Pump.Fi will allow users to borrow for the purchase of memecoins. Source: Pump.fun
Related: Pump.fun unveils its own DEX, moving away from Raydium
Facing Competition
The platform has been dealing with a significant decline in memecoin trading volume on Solana, attributed to various scandals—including the problematic launch of the LIBRA token—that have negatively affected retail traders’ perceptions of memecoins.
By introducing on-chain lending, the platform could potentially attract increased liquidity to the market, which has seen trading volumes stabilize in recent weeks, as per data from Dune Analytics.
In response to increasing rivalry from other platforms, the team has also been diversifying its product offerings.
Raydium, the leading decentralized exchange (DEX) on Solana by trading volume, is preparing to launch its own memecoin launchpad, LaunchLab.
Furthermore, other competing protocols—such as Daos.fun, GoFundMeme, and Pumpkin—are also aiming to capture a slice of Solana’s memecoin market.
Daily count of tokens bonding successfully on the platform. Source: Dune Analytics
On March 20, the platform introduced its own DEX—named PumpSwap—to succeed Raydium as the primary venue for tokens that successfully bootstrap liquidity on its service.
The shift to PumpSwap has streamlined the process for listing new tokens and reduced costs for users, as indicated in an update.
PumpSwap is also set to begin distributing a portion of trading fees to coin creators, according to co-founder Alon.
This newly launched DEX has already garnered over a 10% share of Solana’s trading volumes, surpassing Raydium—and all other Solana applications—in terms of 24-hour fees, according to analytics data. On April 1 alone, PumpSwap generated almost $4 million in fees.
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