In a significant departure from its previous model, Pump.fun, a Solana-based token launchpad, has announced that it will no longer allocate 100% of its revenue towards buying and burning its native token, PUMP. Instead, the platform will adopt a 50/50 revenue split, with half of its net revenue going towards token buybacks and the remaining half being retained for operational expenses, including product development, hiring, marketing, and potential acquisitions. This strategic shift comes after a review of the previous policy, which was in place for nine months, revealed that it was not yielding the desired results. During this period, Pump.fun had burned approximately 36% of PUMP's circulating supply, equivalent to all the tokens purchased from the open market.
The company's co-founder, Alon Cohen, explained that this change in strategy is necessary to ensure the long-term sustainability of the platform. The new approach will enable Pump.fun to invest in its growth and development, while continuing to reduce the circulating supply of PUMP through regular buybacks. This move is expected to have a positive impact on the token's price, as the reduced supply will be met with steady demand, potentially creating a bullish setup for the token.
The announcement has already had a positive impact on PUMP's price, which rose by 6.9% in the 24 hours following the news.