Pump.fun’s Illusion of Hype Driven by Bots, Research Finds

Analyst Naveen_0505 published research claiming that much of the activity on Pump.fun may be driven by trading bot networks.

According to him, bots simulate interest from retail traders, create artificial liquidity, and push users to buy out of FOMO. Here's how it works and why it's important to distinguish real demand from fake activity.

What Are Proxies and How Do They Work

According to the analysis, so-called “Proxies” are bots that execute dozens of small trades over a short period, simulating organic trading activity. Their goal is to create the illusion of strong demand around newly launched tokens.

• These bots operate faster than any human could.
• Visually, it appears as if there’s growing interest in the token.
• Real users see the volume and buy in, unaware of the manipulation.

Numbers and Facts

The research revealed:

• Between 60% and 80% of total trading volume for certain tokens on Pump.fun is generated solely by these bots.
• Bots execute over 20 trades per day from a single wallet.
• The most active wallets are also the ones moving the most volume.

Why This Is a Problem

Simulated liquidity may temporarily boost a token, but in the long term, it causes harm:

• It distorts market signals and misleads retail investors.
• It results in sharp dumps when bots exit positions.
• It undermines trust in the ecosystem and creates conditions for unfair trading.

But There Are Upsides

The analyst emphasizes that:

• Proxy activity can stress-test the scalability of the Solana network.
• Temporary liquidity is added, which real traders can take advantage of.

Still, these practices damage market health. This, he says, is the “Proxy Paradox”:

• On the one hand — high activity and momentum.
• On the other — misinformation, manipulation, and losses.

How To Spot Proxy Farming

If you see explosive volume growth around a new token, ask yourself:

• How diverse are the wallets involved?
• Are there any real news catalysts driving the surge?
• Who is making the trades and how frequently?

You can verify using specialized analytics tools. Naveen_0505 relies on:

• Dune Analytics — for visualizing data.
• Helius — for in-depth on-chain analysis.
• The Solana Analytics Dashboard.

Remember: not all volume equals genuine interest.

This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.