Pump.fun, the controversial Solana-based token platform, has once again executed a massive selloff, transferring over 132,000 SOL—worth nearly $20.9 million—to crypto exchange Kraken. The move, which comes on the heels of a similar dump just two weeks ago, has raised eyebrows across the community and could threaten Solana’s current breakout momentum.

This latest transaction, totaling 132,180 SOL, continues a biweekly trend that’s defined Pump.fun’s strategy in 2024. With this transfer, the platform’s total realized withdrawals this year have now surpassed $303 million, making it one of the most active fee generators on the Solana network.

Millions Earned, Little Returned

While Pump.fun has generated over $400 million in SOL to date, concerns are mounting over its lack of reinvestment into the ecosystem. On-chain data shows that less than $1 million—roughly 0.25% of its haul—has been redistributed back to liquidity providers and token creators. Critics argue that this cash-out behavior undermines the platform’s sustainability and raises ethical questions about its long-term intentions.

Adding to the skepticism is Pump.fun’s apparent avoidance of on-chain tools that could generate passive income. Unlike many platforms that stake or engage in DeFi strategies, Pump.fun opts instead to liquidate its holdings directly via centralized exchanges like Kraken. This approach has amplified concerns that the platform is prioritizing profit over community development.

Solana Breakout at Risk?

The timing of Pump.fun’s latest selloff has raised particular concern because Solana (SOL) is on the verge of a potential bullish breakout. The coin has shown strong technical indicators in recent days, climbing over 4% in the past week and hovering near a crucial resistance level at $166.

Many analysts believe that if SOL clears this resistance, it could rally toward $190 or higher. However, large-scale selloffs from top dApps like Pump.fun could dampen investor sentiment and stall Solana’s price action. While long-term fundamentals remain strong, the market is watching closely to see how these events affect SOL’s trajectory in the coming days.

Still Dominating the Solana Ecosystem

Despite its controversial practices, Pump.fun remains one of Solana’s most dominant applications. The platform’s various wallets still hold over $191 million worth of SOL. One wallet alone contains more than $100 million, with another address holding around $68 million.

Pump.fun also plays a major role in supporting Solana’s network infrastructure. It pays out substantial fees to services like the Jupiter aggregator and Solana routers, contributing to overall ecosystem activity—even as questions loom about its sustainability.

Few Users Profit, Many Provide Exit Liquidity

While the platform has captured the attention of crypto traders and token enthusiasts alike, its actual user success rate remains low. Less than 2% of traders reportedly earn over $1,000 in profit. The vast majority end up acting as exit liquidity for larger holders, especially as bot-driven trading and short-lived hype cycles become more common.

Pump.fun was initially celebrated for creating the tokens that challenged VC-dominated narratives in crypto. However, that phase may be ending. Viral tokens that once exploded in popularity now struggle to make lasting impressions. Tokens like HOUSE have attracted some attention, but haven’t triggered a new wave of excitement.

Graduation Rates Hit All-Time Lows

One of the most telling signs of Pump.fun’s shifting momentum is the declining “graduation rate”—the percentage of tokens that successfully move from the Pump.fun platform to decentralized exchanges (DEXs). That rate has fallen to just 0.81%, down sharply from 2024 levels when token start often hit valuations in the hundreds of millions.

Today, only six Pump.fun tokens have market caps exceeding $100 million, and just one has crossed the $1 billion threshold. While Pump.fun continues to start around 30,000 tokens daily, the quality and longevity of these tokens appear to be diminishing.

Growing Concerns Over Future Token start

Speculation continues to swirl about the potential start of a native Pump. fun token. If released, such a token could raise up to $1 billion, further concentrating capital around the platform. However, community concerns are growing that this could drain liquidity from existing  reduce the broader ecosystem’s vibrancy.

With minimal returns to creators and liquidity providers, many fear that a token start could worsen inequality within the coin space. The imbalance between what the platform extracts and what it gives back is creating friction among developers, traders, and long-time community supporters.

What’s Next for Solana and Pump.fun?

Solana is currently at a critical juncture. Its potential breakout hinges on overcoming resistance and maintaining positive investor sentiment. While Pump.fun’s influence on Solana’s network activity is undeniable, its selloffs may undermine broader confidence in the ecosystem.

Whether Pump.fun evolves into a more community-aligned project or continues on a path of large-scale liquidations remains to be seen. For now, the platform walks a fine line between being a revenue engine and a drain on trust within the Solana ecosystem.

As traders look ahead, the key question will be whether Solana can maintain its bullish trend despite internal pressures—or if actions by its top dApp will weigh down the momentum it has worked hard to build.