Pump.fun, a Solana-based token issuance platform, has been operating under a unique model where every dollar of revenue was used to buy back and burn its native token, PUMP. The goal was to reduce the token's supply and increase its value. However, after reviewing the results of this nine-month policy, the company has decided to change its approach.
Going forward, Pump.fun will split its revenue evenly between token buybacks and operational costs, including product development, hiring, marketing, and potential acquisitions. The previous policy had resulted in the burn of approximately 36% of the token's circulating supply.
The new strategy aims to strike a balance between reducing the token's supply and investing in the company's growth and development. According to co-founder Alon Cohen, this change is necessary to ensure the long-term sustainability of the platform. The shift in strategy has been prompted by the token's price performance, which has been trading sideways despite the significant buybacks.
The company's revenue has also declined, with gross protocol revenue totaling $971.37 million in 2025 but annualizing to roughly $320 million so far in 2026. The new 50/50 split may result in smaller token burns, but it also provides a more stable foundation for the company's operations.
The bull case for the token is that the ongoing burns will continue to reduce the supply, potentially leading to a more bullish setup. On the other hand, the bear case is that the decline in revenue may lead to smaller burns, which could negatively impact the token's price. The announcement of the new strategy has already had a positive impact on the token's price, with PUMP rising 6.9% in the 24 hours following the news.