A market-driven funding model that replaces traditional venture capital selection with live token launches will be tested by Pump.fun, according to the platform’s statement.
A $3 million fund that replaces traditional venture capital gatekeepers with market-driven token launches was announced on Monday by Solana-based meme coin launchpad Pump.fun.
The capital will be distributed through the “Build in Public Hackathon” by the platform’s new investment arm, Pump Fund, funding 12 projects with $250,000 each at a $10 million valuation, according to a statement released by the company on X this Monday.
Unlike conventional accelerators, where judges are pitched by founders, tokens will be launched by winners to let market demand determine their fate.
“Your users are the ones that fund you by betting on you early. Those who can capture the minds of the people are empowered like nowhere else,”
Pump.fun wrote in its statement.
Projects across all sectors and maturity levels, including those outside the blockchain space, are accepted by the hackathon, which mandates that at least 10% of the token supply be owned by participants as they “build in public” via X posts, community development, and Pump.fun livestreams.
Having facilitated over 14 million token launches and generated more than $1 billion in revenue during its first two years, “organic traction” will be prioritized by the platform over traditional metrics like founder pedigree or connections.
Experts Question Transparency of Pump.fun’s Selection Model
However, it is questioned by experts whether transparency can be ensured by Pump.fun’s model, as a February 18 deadline has been set by the platform with a promise that its first winners will be delivered by day 30.
Greater clarity on governance and distribution processes is required by the fund, Musheer Ahmed, founder and managing director of Finstep Asia, told , as the need to ensure projects are not given “bias or favours/preferred treatment from the Pump.fun team” was stressed.
The market-driven approach was compared by him to traditional VC processes where decisions are driven by “investment committees’ evaluation of a start-up and also the profile of the founder/s and the core team,” with those judgements being essentially described as “subjective.”
While it is planned by Pump.fun to select winners based on “the traction and users that each project onboards,” the critical need for verification mechanisms was pointed out by Ahmed to ensure traction is “genuine” and “not AI-driven or bot-driven” to prevent gaming of the selection process.
The model was described as “certainly an interesting concept” by Pratik Kala, head of research at Apollo Crypto, in a statement , suggesting that “social proof and signal that people are excited about a project” could be provided by this approach, which draws parallels to prediction markets.
“It’s hard to say what rights (if any) tokenholders have—we have seen numerous examples of using tokens as a bootstrapping mechanism, then siphoning off real money into equity structures,”
he added, noting that LaunchCoin attempted a similar model last year but failed.
“Overall, it is believed by Kala that it is too early to tell if this model will work,” he said. “For this to succeed, transparency and look-through on the project’s success and dollars flowing back to tokenholders must be maintained.”
The announcement is made as an attempt is led by Pump.fun to rehabilitate its image following a turbulent 2025, occurring after livestreaming was paused over animal cruelty and self-harm broadcasts.
A class action is also being faced by the platform, alleging that its parent, Baton Corp., operated an illegal securities exchange by enabling the issuance of 50,000 unregistered tokens while collecting nearly $500 million in fees.
