Pump.fun, a Solana-based token issuance launchpad, has been operating under a straightforward model where every dollar of revenue 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 change course. In a recent announcement, Pump.fun revealed that it will now divide its revenue evenly between token buybacks and operational expenses, replacing the previous 100% buyback policy that had been in place for nine months.
The new strategy involves allocating half of the net revenue from the company's core products - Pump.fun bonding curve, PumpSwap, and Terminal - into an irreversible smart contract that automatically buys PUMP on the open market and burns it. The remaining half will be retained by the company to fund product development, hiring, marketing, and potential acquisitions.
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. According to Co-founder Alon Cohen, this change is necessary to ensure the long-term sustainability of the platform, as the previous policy was not yielding the desired results. Despite generating over $1 billion in lifetime revenue and using 100% of it for token buybacks, PUMP's price has been trading sideways below its launch valuation for most of 2026. The new strategy is expected to have both positive and negative effects on the token's price.
On one hand, the reduced revenue allocated to buybacks may lead to smaller burns, but on the other hand, the ongoing burns will continue to reduce the token's supply, potentially creating a bullish setup. In the 24 hours following the announcement, PUMP's price rose by 6.9%, and the platform's annualized fees and revenue stand at $802 million and $416 million, respectively, according to DefiLlama.