In a significant strategic overhaul, Pump.fun, a Solana-based token issuance launchpad, is abandoning its previous model where every dollar of revenue was used to buy back and burn its native token, PUMP. This approach, which had been in place for nine months, aimed to support the token's price by continuously reducing its supply. However, following a review, the company has decided to adopt a new 50/50 revenue split.
Under this revised strategy, 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 designed to automatically purchase PUMP tokens on the open market and burn them over the next year. The remaining half will be retained by the company to fund product development, hiring, marketing initiatives, and potential strategic acquisitions.
This shift comes after Pump.fun had burned approximately 36% of PUMP's circulating supply, acquired through buybacks over the past nine months, in two transactions on the Solana blockchain. The burn process involves the permanent removal of tokens from circulation, typically by sending them to a wallet address that is not controlled by anyone.
This move is one of the largest single-event supply reductions in the history of cryptocurrency, measured by the share of circulating tokens. According to Alon Cohen, co-founder of Pump.fun, this strategic adjustment is necessary to ensure the long-term viability of the platform, enabling it to thrive for decades to come. The decision is partly driven by the token's price performance, with PUMP trading largely sideways below its initial valuation in 2026, despite the company generating over $1 billion in lifetime revenue and dedicating 100% of its revenue to token buybacks for nine months.
The community has been informed about this change through a post on X, where Cohen provided additional context on the company's vision and future plans. While the move to a 50/50 revenue split may raise concerns due to the cyclical nature of memecoin launchpad volume, which can be subject to mean reversion, the ongoing burns are expected to have a positive impact on the token's supply dynamics. By locking 50% of future revenue into burns, Pump.fun ensures that a significant portion of its tokens will be permanently destroyed every week, regardless of future decisions. If the company maintains even half of its 2025 revenue levels, the continued burns could retire a substantial chunk of the remaining tokens over the next 12 months.
This reduction in supply, coupled with steady demand, could create a bullish scenario for the token that it may not have experienced since its launch. Following the announcement, PUMP saw a 6.9% increase in value over 24 hours, with the platform's annualized fees reaching $802 million and revenue standing at $416 million, as per data from DefiLlama, solidifying Pump.fun's position among the rare crypto projects that generate significant cash flows at scale.