Lightspeed Newsletter: The Pump.fun exploit draws yawns and jeers

Howdy!

Happy Friday, folks. New York seems to be holding its collective breath today as the Knicks are about to play the Pacers for a trip to the conference finals.

Solana seems less nervous today, since the memecoins are already back online after yesterday’s shenanigans.

Let’s get into it, shall we?

— Jack Kubinec

The Pump.fun exploit makes no sense

Solana’s highest-grossing protocol by revenue was exploited for millions of dollars-worth yesterday, but no one seems particularly upset.

Pump.fun, the Solana memecoin app, lost nearly $2 million after a rogue employee with admin privileges used their access to the project’s withdrawal authority and a number of flash loans to buy up tokens. The employee then siphoned out the liquidity held in its bonding curve contracts, Pump.fun detailed in a postmortem Thursday evening.

Usually, platforms being exploited creates pretty bad PR — both for the project, and in some cases, its underlying blockchain.

That doesn’t seem to have been the case so far. Pump.fun redeployed its contracts and resumed trading the same day it was exploited, and DeFiLlama data shows the platform’s revenue was higher Thursday — the day of the exploit — than the day before.

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Pump.fun has been a big driver of Solana activity overall. The platform has been the highest-revenue protocol not named Ethereum over the past 30 days, hauling in $3 million more than DeFi heavyweight Uniswap Labs, according to DeFiLlama.

The app said on X that it was “working with some of the most esteemed security folks in the space,” but it didn’t say which esteemed security folks, and a representative for Pump.fun declined to comment. The project’s code is still closed-source.

Solana investors also responded with a collective shrug to the exploit of Pump.fun. Solana traded mostly sideways throughout the day Thursday before climbing to a monthly high near $170 after Pump.fun released its postmortem, according to CoinGecko. Solana was trading at around $167 at press time, a level it hadn’t seen since April 12.

Even the apparent exploiter, who took credit for the hack in a colorful series of X posts criticizing the Pump.fun team for mistreating them and custodying user funds, didn’t seem to garner much ill will from Solana’s community. They went on a series of X spaces Thursday afternoon where speakers broadly praised the exploiter’s actions. They’ve variously been compared to crypto’s Robin Hood or Edward Snowden.

Sometimes markets aren’t all that rational, I guess, but also, as we have previously written regarding Pump.fun: “Sometimes, the grift is itself entertainment.”

If memecoins exist mainly for fun rather than for profit, then perhaps a memecoin platform being exploited isn’t so catastrophic — so long as the exploit was entertaining. And in this case, boy was it.

– Jack Kubinec

Zero In

Source: https://analytics.step.finance/performance

Another big week for Solana, with unique active programs increasing by 1,611 and total on-network instructions surging to nearly 4.6 billion. In other words, more developers are deploying and maintaining applications within the ecosystem, leading to higher computational demand.

Concurrently, Solana surpassed Ethereum in daily transaction revenue on May 12, driven by a significant spike in fees. This surge provides further evidence of Solana’s ability to attract high-value transactions despite congestion.

Although the increase in fees has raised concerns about potential deterrence in the past, we continue to see heightened demand for Solana-based services.

– Jeff Albus

The Pulse

Island DAO kicks off today in Chania, Crete. But don’t be fooled by the name — it seems to be more of a coworking meetup than a decentralized autonomous organization.

The event — aimed at apparently transforming a beachfront villa into a Solana coworking paradise — has sparked interest on social media as attendees arrive on the island.

It might be good that the gathering seems to be mostly isolated to this one location, given that digital nomads are known to have a significant impact on the places they congregate.

But for visitors who are true students of history, Crete will add a rich cultural backdrop to the gathering. The island is deeply connected to the ancient Minoan civilization, believed by some to have inspired Plato’s tales of Atlantis. In fact, locals claim the Atlantis story may recount a volcanic disaster that occurred on the nearby island of Thira, known today as Santorini (a theory that this editor wholeheartedly believes.)

This gathering is sure to be exciting for the Solana tribe, but it’s vital to tread lightly, preserving the island’s beauty and heritage. If DAO members are mindful of their impact, the island can remain a welcoming destination long into the future. Γεια μας!

– Jeff Albus