The Solana-based token launchpad, Pump.fun, has been operating under a straightforward model where every dollar of revenue generated was used to purchase and burn its native token, PUMP. Theoretically, this continuous reduction in supply was intended to support the token's price and align its value with the platform's success. However, after reviewing the previous policy, the company has decided to adopt a new approach. In a post on X, the firm announced that it would implement a 50/50 revenue split.
Half of the net revenue from its core products - the Pump.fun bonding curve, PumpSwap, and Terminal - will be allocated to an irreversible smart contract that automatically buys PUMP on the open market and burns it for the next year. The remaining half will be retained by the company to fund product development, hiring, marketing, and potential acquisitions. This marks a significant shift from the previous policy, where 100% of revenue was dedicated to token buybacks.
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. Co-founder Alon Cohen explained that this change is necessary to ensure the company's long-term viability, as the previous model was not sustainable.
The price chart of PUMP has been trading sideways below its launch valuation despite the token buybacks, prompting the need for a new strategy. The move has been met with a mixed reaction, with some arguing that the reduced revenue will result in smaller token burns, while others see it as an opportunity for the token to appreciate in value due to the reduced supply. According to DefiLlama data, Pump.fun's revenue has been declining, with $971.37 million generated in 2025 and an annualized revenue of $320 million so far in 2026.
Nevertheless, the company remains optimistic, with PUMP rising 6.9% in the 24 hours following the announcement.