In a significant change of strategy, Pump.fun, a Solana-based token issuance launchpad, has announced that it will no longer dedicate all its revenue to buying and burning its native token, PUMP. Instead, the platform will adopt a 50/50 revenue split, allocating half to token buybacks and the remaining half to operational costs, including product development, hiring, marketing, and potential acquisitions.
This shift in strategy comes after a review of the previous policy, which had been in place for nine months, revealed that it was not yielding the desired results. The company's co-founder, Alon Cohen, explained that the change is necessary to ensure the long-term sustainability of the platform.
Over the past nine months, Pump.fun had burned approximately 36% of PUMP's circulating supply, with the tokens being permanently removed from circulation. The new strategy will see half of the platform's revenue being used to buy back and burn PUMP tokens, while the other half will be retained by the company to support its operations and drive growth. This move is expected to have a significant impact on the token's price, with some analysts predicting a bullish outlook due to the reduced supply and steady demand.
The announcement has already had a positive impact on the token's price, with PUMP rising by 6.9% in the 24 hours following the news.