A recent report by Pine Analytics states that token issuers on Pump.fun have been strategically financing sniper wallets to purchase their own meme coins. This has affected more than 15,000 token releases on the platform.
These sniper wallets primarily operated during US trading hours, employing established, lucrative tactics. Their activities were camouflaged by unrelated bot actions, making it challenging to identify and they can quickly adjust to countermeasures.
Snipers have been engaging freely in Pump.fun's meme coin market despite ongoing controversies and criticisms. Pine Analytics' report has unveiled systematic market manipulation on the platform, with these snipe transactions representing around 1.75% of all launch activities on Pump.fun.
The report discloses that within a month, over 15,000 SOL in profit was gained through these actions, involving more than 4,600 sniper wallets and 10,400 token issuers. These wallets exhibited high success rates, prompt exits, and organized operational behaviors.
On Pump.fun, developers typically support sniper wallets, giving them early notice of upcoming token launches. These wallets swiftly purchase tokens at the launch and promptly sell them off, with 85% being liquidated within five minutes and 90% in one or two swap events.
Developers exploit this tactic to create artificial demand for their tokens, giving them an unfair advantage as retail investors buy tokens unaware of the prior sell-off. This manipulation undermines trust in the platform.
Identifying genuine snipers required precise methods from Pine Analytics. Approximately half of meme coin launches on Pump.fun involve sniping, mostly by bots utilizing the "spray and pray" approach.
Efforts to filter out snipers not directly linked to developer wallets reveal the complexity of tracking these actions. This indicates a lack of defenses against systematic exploitation on Pump.fun, calling for continuous vigilance and proactive measures.
Establishing effective policies to combat meme coin sniping on Pump.fun would be challenging due to the entrenched nature of this tactic. Analysts suggest that fostering a culture that prioritizes transparency in the on-chain environment could be a transformative long-term solution. Such a shift would significantly impact the meme coin sector's survival.