Pump.fun, a Solana-based token launchpad, has revamped its revenue allocation strategy. Previously, the platform directed all its revenue toward buying and burning its native token, PUMP. This approach, aimed at supporting the token's price by consistently reducing its supply, is being replaced by a 50/50 split.
Under this new strategy, half of the net revenue from the platform's core products - the Pump.fun bonding curve, PumpSwap, and Terminal - will be channeled into an irreversible smart contract for buying and burning PUMP tokens over the next year. The remaining half will be retained by the company to fund product development, hiring, marketing efforts, and potential acquisitions.
This change follows a review of the previous buyback policy, which, despite burning approximately 36% of PUMP's circulating supply over nine months, did not yield the desired outcomes. The move is part of the company's efforts to ensure long-term sustainability and growth, as highlighted by co-founder Alon Cohen. Despite generating over $1 billion in lifetime revenue and conducting significant token buybacks, PUMP's price has largely remained stagnant, prompting the need for strategic adjustments to secure the platform's future.
The new approach aims to strike a balance between supporting the token's value and investing in the company's operations to drive growth and longevity.