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, aimed at reducing the token's supply and theoretically increasing its value, has been in place for nine months.
However, the company has now decided to change its strategy, citing a review that showed the previous model was not entirely beneficial. 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 allocated to an irreversible smart contract for buying and burning PUMP tokens over the next year.
The remaining half will be retained by the company for investments in product development, hiring, marketing, and potential acquisitions. This shift in strategy comes after Pump.fun burned approximately 36% of PUMP's circulating supply, which is one of the largest single-event supply reductions in crypto history. Co-founder Alon Cohen explained that this change is necessary to ensure the company's long-term sustainability and ability to invest in growth initiatives.
The price of PUMP has been trading sideways for most of 2026, despite the company's significant revenue generation and token buybacks. The new strategy is expected to have a mixed impact, with some arguing that the reduced burn rate could negatively affect the token's price, while others see it as an opportunity for the company to invest in its growth and increase the token's value in the long run. According to DefiLlama data, Pump.fun's revenue has been declining, with $971.37 million generated in 2025 and an annualized revenue of $320 million so far in 2026. The 50% revenue allocation to burns will result in smaller token burns compared to the previous 100% allocation.
Nevertheless, the ongoing burns are expected to reduce the token's supply significantly, potentially leading to a bullish setup for PUMP. Following the announcement, PUMP's price increased by 6.9% within 24 hours, with the token's annualized fees and revenue standing at $802 million and $416 million, respectively.