Something wild is happening in the Solana ecosystem. 

Over $287 million worth of SOL has effectively vanished from circulation through Pump.fun's token graduation system.

Over 93,500 tokens have already made it through graduation, with last month seeing over 24,000 tokens crossing the finish line.

Let’s explore what’s torching all these tokens. 

We Didn’t Start The Fire

Pump.fun co-founder Alon Cohen said on X, “When a coin graduates from pump.fun, the liquidity pool is burned.”

Liquidity pools on the platform have a minimum price, meaning that thousands of dollars of SOL are taken from circulation every time a coin bonds.

With hundreds of migrations daily, conservative estimates put the number around $500m of SOL being burned forever.

This isn't your typical token burn, where the token is permanently removed from circulation via a null address.

Instead, when tokens ‘graduate’ from Pump.fun, the SOL liquidity within the pool gets locked away in Raydium pools. 

Essentially, these LP tokens are sent to an unreachable address that isn’t null but accomplishes the same as a traditional token burn.

This mechanism is in place to help prevent rug pulls and has the potential to ensure a greater level of transparency.

Jaw-Dropping Numbers

Fresh data from Flipside shows that 93,500 tokens have already made it through graduation.

Last month alone saw 24,000 tokens cross the finish line, setting a new record that's likely to be broken again this month as momentum continues. 

Tokens need to stack up a 79 SOL market cap before they can even think about graduating. 

Once they make the grade, $17,000 worth of liquidity gets locked up forever, adding to that sweet half-a-billion pile in burned SOL. 

This is already creating a tight supply squeeze that nobody really expected and is only adding to the bullish case for Solana.

The Juice Is Worth The Squeeze

Currently, 2.87 million SOL is locked away for all time in these liquidity pools.

62,000 pools are holding 15-20 SOL each, while 16,298 pools are sitting pretty with 20-25 SOL.

But of course, distribution matters, and a massive 84% of pools are keeping it modest with less than 25 SOL.

What’s more intriguing is that 74.6% of these pools have gone quiet – no volume to speak of happening inside them. 

That translates to 1.38 million SOL – worth over $287 million – essentially taking a permanent vacation from the circulating supply.

Even if it’s just a flash in the pan, and meme coins go the way of the dinosaur (unlikely), millions of SOL are now locked away with a constant stream of new tokens flooding in.

Dancing The Deflation Tango

Part of the beauty of Pump.fun is that anyone can launch a token, and buyers will jump in, hoping to catch the next moonshot. 

However, the dark side of this equation is that fewer than 2% of tokens make it to graduation.

Regardless of this immense fail rate, the situation has created some legitimate deflationary pressure on SOL's supply that could make even the most hardened bears question their short positions.

Sometimes, it’s the unexpected twists that make the story worth following.