Pump.fun, a Solana-based token issuance launchpad, has been operating under a unique model where all revenue generated was used to buy back and burn its native token, PUMP. This approach, which has been in place for nine months, aimed to support the token's price by continually reducing its supply. However, following a review, the company has decided to alter its strategy.
Going forward, Pump.fun will adopt a 50/50 revenue split, where half of the net revenue from its core products - the Pump.fun bonding curve, PumpSwap, and Terminal - will be dedicated to buying back PUMP tokens on the open market and burning them. The remaining half will be retained by the company to fund product development, hiring, marketing efforts, and potential acquisitions. This change marks a significant shift from the previous policy, where 100% of revenue was allocated to token buybacks. 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.
The decision to adjust the token burning strategy was influenced by the need for the company to invest in its growth and sustainability. As explained by co-founder Alon Cohen, the business requires a portion of its revenue to ensure its longevity and continued success. The price performance of PUMP has been largely sideways in 2026, despite the significant token buybacks.
The new strategy is expected to have a mixed impact, with the bear case being that the reduced revenue allocation to buybacks may result in smaller token burns, especially considering the cyclical nature of memecoin launchpad volume. On the other hand, the bull case argues that the removal of a large block of supply from circulation, combined with the ongoing burns, could lead to a meaningful reduction in the remaining token supply over the next 12 months, potentially creating a bullish setup for PUMP. Following the announcement, PUMP experienced a 6.9% increase in value over 24 hours, with the project generating significant cash flows, as evidenced by its annualized fees of $802 million and revenue of $416 million, according to DefiLlama data.