Pumpkin Fund:

In our previous Features article, we introduced the Pumpkin Fund—a mechanism that allows users to earn a share of every token launched via the Pumpkin protocol. Let’s now dive deeper into how it works and why it embodies Pumpkin’s core vision, making it a foundational element of the platform.

The Harsh Reality of Memecoins

Let’s face it—99% of memecoins fail to gain traction, and chances are, you’re not holding the lucky 1% that takes off.

The Pumpkin Fund flips the script. By securing your stake in every project launched on the platform, you’re no longer betting on just one token—you’re gaining exposure to the success of all of them. This makes the Pumpkin Fund a unique and powerful way to participate in this ecosystem, without relying on luck.

What is the Pumpkin Fund, and How Does It Work?

The Pumpkin Fund acts as a repository for the fees generated by the Pumpkin protocol. Its primary purpose is to support and enhance the value of the $PKIN token while aligning user incentives with the protocol’s success.

This fund operates as a separate smart contract, seamlessly integrated with the protocol to accumulate tokens over time. As the protocol generates fees, the Pumpkin Fund grows in value by collecting these tokens.

How the Pumpkin Fund Works: A Two-Stage Process

The Pumpkin Fund operates in two key stages:

1. Accumulating Tokens (Protocol → Pumpkin Fund):

   • The fund gathers tokens through a 1% fee applied to every sell transaction. These fees are accumulated into the Pumpkin Fund, steadily increasing its value.

2. Burning $PKIN Tokens (Pumpkin Fund → User):

   • Users can access the tokens held in the Pumpkin Fund by burning their $PKIN tokens.

   • The percentage of $PKIN tokens burned determines the percentage of the fund’s tokens a user can claim.

Example:

• The Pumpkin Fund holds $10M worth of various tokens from protocol fees:

  • $1M VINE

  • $3M ARC

  • $6M FARTCOIN

• Alex owns 0.1% of the total $PKIN supply.

• By burning all his $PKIN tokens, Alex can claim 0.1% of the Pumpkin Fund’s value, equivalent to $10,000:

  • $1,000 VINE

  • $3,000 ARC

  • $6,000 FARTCOIN

This mechanism ensures that $PKIN tokens not only serve as a utility asset but also directly link users to the protocol’s growth and success.

How Does the Pumpkin Fund Impact the $PKIN Token Price?

The 1:1 burning mechanism of $PKIN tokens to redeem Pumpkin Fund tokens creates opportunities for arbitrage when a divergence occurs between the value of the Pumpkin Fund and the market price of $PKIN.

• Arbitrage Opportunity: If $PKIN’s total value (market cap) drops compared to the Pumpkin Fund’s value, holders can burn their $PKIN to grab fund tokens that are worth more.

• Price Floor: $PKIN’s value can’t drop below the value of the Pumpkin Fund. If there’s a gap, burning will keep happening, reducing $PKIN’s supply and driving up demand until things even out.

• Value Boost: As the Pumpkin Fund grows, it lifts $PKIN’s value too. Think of it as a backstop that keeps $PKIN’s price tied to real, underlying assets.

Example:

• Initially, the Pumpkin Fund’s value and the $PKIN market cap are both $20M.

• Over time, the Pumpkin Fund grows to $30M due to accumulated fees, while the $PKIN market cap remains at $20M.

• Justin holds 0.1% of the $PKIN supply, worth $20,000 based on the $20M market cap.

• If Justin burns all his $PKIN tokens, he will receive 0.1% of the Pumpkin Fund’s tokens, now worth $30,000.

As more users take advantage of this disparity, $PKIN tokens are burned, reducing the total supply and increasing the $PKIN market cap. This process continues until the market cap of $PKIN aligns with the value of the Pumpkin Fund, effectively raising the $PKIN token value.

Why the Pumpkin Fund?

The Pumpkin Fund is a standout feature that sets Pumpkin apart from other token launch protocols by aligning the incentives of the protocol with its users.

• Exposure to Every Launch:
  No need to worry about betting on the wrong token. With the Pumpkin Fund, you’re automatically tied to the combined success of every project launched on the platform, ensuring you benefit from the entire ecosystem’s growth.

• Tied to Success:
  $PKIN’s value grows alongside the protocol. Every time a project launches through Pumpkin, the fund grows, and so does your potential share.

• Boosts $PKIN Value:
  With its burning mechanism, the fund strengthens $PKIN’s value by reducing supply while increasing its appeal.

• A Win-Win Cycle:
  The Pumpkin Fund creates a positive feedback loop:

  • High usage generates fees.

  • Fees grow the fund.

  • A bigger fund boosts $PKIN’s value.

  • A stronger token attracts even more usage.

This feedback loop ensures that the protocol’s success directly benefits its users and $PKIN holders, making the Pumpkin Fund a cornerstone of Pumpkin’s ecosystem.

Get updated

Here are some quick links to get updated on what’s happening in Pumpkin.

Website:  https://pumpkin.fun/

Telegram: https://t.me/pumpkindotfun

Twitter:  https://x.com/pumpkindotfun

Gitbook: https://pumpkindotfun.gitbook.io/pumpkin-docs