Graphite

Trade Context

• Slightly before the pending PumpFun ICO
• Fundamental and revenue comparison to PumpFun
• Partnership with long-standing Solana ecosystem leaders, Bonk
• Experienced team with previous success in the NFT space

Fundamentals

As a partner of BonkFun, Graphite received 7.67% of the fees generated from the platform. From these fees 100% were used for buybacks of the $GP token. At the time, PumpFun was using around 25% of fees for buybacks on $PUMP and Bonk was using 50% for buybacks on $BONK.

BonkFun eventually flipped PumpFun in revenue, tokens launched, and fees.

Thesis

With the hype around PumpFun being the fastest-growing startup in the world, there was clearly a large pocket of liquidity ready to deploy into the launchpad narrative. Despite not having the greatest reputation, PumpFun was able to raise $500 million in a few hours for its ICO. Graphite ($GP) was a bet on a team with strong ecosystem connections and a positive reputation. The path to gaining market share in the launchpad space was wide open for a less extractive team to capture. Based on the buyback structure and revenue metrics, Graphite was largely undervalued relative to PumpFun and $BONK.

The Trade

Waited for signs the team was committed to pushing it. Made first purchases between $0.25 and $0.50. With a few of the coins launched on the platform performing well, this was a clear entry. First sells came around $0.90, with the majority of the trade being closed between $2.50 and $3.50.

Reflection

Proud of my conviction levels for this trade. I posted about it frequently in chats, detailing developments along the way. However, I underestimated the gap between hype and momentum and fundamentals. This led to me closing the trade before the top. Focusing strictly on fundamentals guided me through the trade, but failure to include momentum in my thesis kept this from being a perfect trade.