Pump.fun, a Solana-based token issuance platform, has been using its revenue to buy back and burn its native token, PUMP, for the past nine months. However, this strategy is being revised, with the company now opting to split its revenue evenly between token buybacks and operational costs. The new approach will see half of the revenue from Pump.fun's core products - the bonding curve, PumpSwap, and Terminal - being used to buy back and burn PUMP tokens, while the other half will be retained for product development, hiring, marketing, and potential acquisitions.
This change in strategy comes after the company burned approximately 36% of PUMP's circulating supply over the past nine months, with co-founder Alon Cohen citing the need for a more sustainable approach to ensure the platform's long-term viability. The move has been prompted by the fact that despite generating over $1 billion in lifetime revenue, 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 company seeking to maintain its growth trajectory while also reducing the circulating supply of PUMP tokens. According to DefiLlama data, Pump.fun's gross protocol revenue totaled $971.37 million in 2025 but has declined to an annualized $320 million so far in 2026.
The bear case for this move is that the reduced revenue will result in smaller token burns, whereas the bull case is that the ongoing burns will lead to a significant reduction in the circulating supply of PUMP tokens, potentially creating a bullish setup for the token. Following the announcement, PUMP's price rose by 6.9% within 24 hours, with the token's annualized fees and revenue standing at $802 million and $416 million, respectively.