Pump.fun, a Solana-based token issuance launchpad, has been operating under a model where all revenue generated was used to buy back and burn its native token, PUMP. However, after a review of this nine-month policy, the company has decided to change its approach. Going forward, half of the net revenue from Pump.fun's core products will be allocated to an irreversible smart contract that automatically buys and burns PUMP tokens on the open market, while the other half will be retained by the company for investment in products, hiring, marketing, and potential acquisitions.
This shift in strategy comes after Pump.fun burned approximately 36% of PUMP's circulating supply 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 business.
Despite using 100% of revenue for token buybacks, PUMP's price has remained stagnant, trading sideways below its launch valuation. The new strategy aims to strike a balance between token buybacks and operational costs, with the goal of keeping Pump.fun alive for decades to come.
The price chart of PUMP has been a major factor in this decision, with the token spending most of 2026 trading sideways despite the company generating over $1 billion in lifetime revenue. The move has been seen as a turning point for $PUMP and Pump.fun, with the company's co-founder providing more context on the bigger picture and where the company is headed. The bear case for this move is that memecoin launchpad volume is cyclical and mean-reverting, with Pump.fun's gross protocol revenue declining from $971.37 million in 2025 to an annualized $320 million in 2026.
However, the bull case is that the math on remaining tokens is in favor of the company, with the burning of 36% of PUMP's circulating supply removing a large block of supply that could have hit the market. Locking 50% of future revenue into more burns means more tokens will be permanently destroyed every week, regardless of what the team decides later.
If Pump.fun continues to generate revenue at even half the level it did in 2025, the ongoing burns would retire a meaningful chunk of what remains over the next 12 months, potentially forming a bullish setup for the token.