Pump.fun, a Solana-based token issuance launchpad, has been operating under a unique model where all revenue generated was used to buy back and burn its native token, PUMP. This approach, which aimed to support the token's price by continuously reducing its supply, is now being revised. Following a review, the company has decided to adopt a new strategy, dividing its revenue equally between token buybacks and operational expenses, including product development, hiring, marketing, and potential acquisitions.
This shift marks a significant change from the previous policy, where 100% of revenue was allocated towards buying back and burning PUMP tokens. Over the past nine months, Pump.fun has burned approximately 36% of PUMP's circulating supply, which is one of the largest single-event supply reductions in crypto history. The company's co-founder, Alon Cohen, explained that this change is necessary to ensure the long-term sustainability of the business, allowing it to thrive for decades to come. Despite the previous model's intentions, PUMP's price has been trading sideways below its launch valuation for most of 2026, prompting the need for a new approach.
The revised strategy involves using half of the revenue from Pump.fun's core products to buy back and burn PUMP tokens, while the other half will be retained by the company for operational purposes. This move is expected to have a significant impact on the token's supply and demand dynamics, potentially leading to a bullish setup for PUMP.
In the 24 hours following the announcement, PUMP's price rose by 6.9%, with the project generating substantial revenue and fees, according to DefiLlama data.