Pump.fun, a Solana-based token issuance launchpad, has been operating under a straightforward model where all revenue generated was used to buy back 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 growth.
However, after reviewing the outcomes of this 100% buyback policy over the past nine months, the company has decided to change its approach. In a recent announcement, Pump.fun revealed that it will now divide its net revenue equally between token buybacks and operational costs, including product development, hiring, marketing, and potential acquisitions. Half of the revenue will be allocated to an irreversible smart contract designed to purchase PUMP tokens on the open market and burn them over the next year. The other half will be retained by the company to support its operational needs.
This shift in strategy comes after Pump.fun burned approximately 36% of PUMP's circulating supply, which it had acquired through buybacks over the past nine months. The company's co-founder, Alon Cohen, explained that this change is necessary to ensure the long-term sustainability of the platform, as the previous model did not fully support the company's growth objectives.
Despite generating over $1 billion in lifetime revenue and using 100% of it for token buybacks, PUMP's price has remained relatively stable, trading sideways below its launch valuation for most of 2026. The new strategy aims to strike a balance between supporting the token's price and investing in the company's future growth. The impact of this change on PUMP's price remains to be seen, but the reduced supply of tokens could potentially lead to increased demand and a more bullish outlook for the token.