Original author: Ma He, Foresight News
On July 21st, Pump.fun officially announced the launch of the BOOST mode, designating it as the new standard default token launch mechanism. Following the announcement, the price of PUMP continued to fluctuate around $0.002.
According to the official explanation, historical data shows that whenever a token graduates from the bonding curve and migrates to a liquidity pool, approximately 20% of the liquidity becomes "dead liquidity." Even if all holders sell, this portion of funds remains permanently locked in the LP, never to be effectively utilized again. The platform estimates that this mechanism leads to over $100 million in liquidity being permanently lost each year.
The core action of BOOST mode is straightforward: it takes this portion of funds that would have been wasted and, within the first 5 minutes after token migration, continuously buys the token via TWAP (Time-Weighted Average Price) and immediately burns all purchased tokens. When a token graduates, Pump.fun forcibly withholds roughly 20% of the funds. Calculated based on fixed migration rules, the SOL pair withholds 17.6 SOL, and the USDC pair withholds approximately $2516.
These funds entirely come from the liquidity "sacrificed" during previous migrations, not from new platform subsidies. After the buy order is completed, the corresponding tokens are directly burned, creating short-term buying pressure while permanently reducing the circulating supply.
Using Reserves to Provide 5 Minutes of Buying Pressure for Tokens
Pump.fun's classic process is: users create a token with one click, trade on the bonding curve, and when the token reaches a certain market cap threshold, it automatically migrates to the PumpSwap liquidity pool. Upon migration, the platform locks a portion of the liquidity into the LP at a set ratio to ensure subsequent trading depth.
The issue lies in the high proportion of these locked funds. Even if the token's price later goes to zero and everyone sells, a sum of "dead money" remains in the LP. This money can neither be withdrawn nor reallocated to other active assets, resulting in systemic capital waste. The official estimate is "over $100 million per year."
BOOST mode does not change the trading experience on the bonding curve, nor does it adjust the graduation threshold itself. BOOST mode does not arbitrarily add or release any external liquidity. Its essence is to extract the 20% of settlement funds that were originally destined for the LP and use them to buy and immediately burn tokens on the secondary market via TWAP within 5 minutes.
The official statement clarifies that Pump.fun tokens migrating after 22:23 Beijing Time on July 21st will automatically have the BOOST configuration enabled. Tokens that have already migrated before this time, as well as tokens launched via the Mayhem (AI Agent Lab) mode, do not benefit from this mechanism.
5-Minute Fireworks
As of July 22nd, Pump.fun's current annualized revenue is approximately $342.54 million, with total token buyback value around $411.27 million. However, its token price remains far from its high of $0.008. Relying solely on large-scale buybacks can no longer effectively boost price expectations.
The essence of BOOST is not to add another round of buybacks for PUMP, but to attempt to solve the product issue of the launchpad itself.
The logic behind this might be: if meme tokens, after graduation, could have slightly thicker order books and slightly better short-term performance, trader retention and repurchase willingness would be higher. Most PVP players don't care about whether a Meme coin lives or dies three days later; they care about whether it can "pump" at the moment of graduation. Pump.fun's official team likely sees through this. Rather than defensively locking 20% of funds in the LP pool, it's better to turn that money into "fireworks" for the first 5 minutes.
The platform's real moat is not "large token issuance volume," but rather "a certain proportion of issued tokens can sustain trading volume." Only when the latter is stable can protocol revenue be truly sustainable. Stable or growing revenue provides continuous ammunition for buybacks, rather than making buybacks look like "propping up the price with existing revenue."
Of course, many traders are concerned that the additional buying pressure could lower the actual difficulty of launching a project, potentially making more low-quality tokens appear "successful" and thereby encouraging more aggressive launch behaviors. Others point out that the 5-minute TWAP buying window is still short. Once buying stops after 5 minutes and faces large sell orders, the token price could crash with more exaggerated slippage than before. This essentially trades extremely high post-sell-off risk for the illusion of a pump in the first 5 minutes.
