Pump.fun, a Solana-based token issuance platform, has been operating under a unique model where all revenue generated was used to buy back and burn its native token, PUMP. This approach, in theory, aimed to support the token's price by continuously reducing its supply.
However, after a nine-month review, the company has decided to alter this strategy, citing the need for a more balanced approach to ensure the platform's long-term viability. The new policy involves splitting the revenue evenly between buying back PUMP tokens for burning and allocating funds for operational expenses, including product development, hiring, marketing, and potential acquisitions.
This shift comes after Pump.fun burned approximately 36% of PUMP's circulating supply over the past nine months, a significant reduction in token supply. The decision to change the revenue allocation strategy is driven by the need to invest in the business to secure its future, as stated by co-founder Alon Cohen.
Despite the previous policy, PUMP's price has remained relatively stable, trading sideways for most of 2026. The new strategy aims to strike a balance between token supply reduction and business investment, potentially setting a bullish tone for the token's future. The move has been met with a positive response, with PUMP seeing a 6.9% increase in the 24 hours following the announcement.