Pump.fun, a Solana-based token issuance platform, has been operating under a straightforward model where every dollar of revenue was used to purchase and burn its native token, PUMP. Theoretically, this constant reduction in supply was intended to support the token's price and align its value with the platform's success. However, after reviewing the previous policy, the company has decided to adopt a new approach. In a recent announcement, Pump.fun revealed that it will now divide its revenue equally between buying back and burning PUMP tokens and funding operational costs.
This new 50/50 split will apply to revenue generated from the platform's core products, including the Pump.fun bonding curve, PumpSwap, and Terminal. Half of the revenue will be allocated to an irreversible smart contract, which will 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 invest in product development, hiring, marketing, and potential acquisitions.
Over the past nine months, Pump.fun had been allocating 100% of its revenue to buybacks, resulting in the burn of approximately 36% of PUMP's circulating supply. This significant reduction in supply is one of the largest in crypto history.
According to co-founder Alon Cohen, the change in strategy is necessary to ensure the platform's long-term survival and growth. Despite generating over $1 billion in lifetime revenue and using 100% of revenue for token buybacks, PUMP's price has been trading sideways below its launch valuation for most of 2026.
The new strategy aims to address this issue by providing the company with the necessary funds to invest in its operations and drive growth. While there are bearish concerns regarding the cyclical nature of memecoin launchpad volume, the bull case suggests that the ongoing burns will reduce the supply of PUMP tokens, potentially leading to a bullish setup for the token. Following the announcement, PUMP's price rose by 6.9% in 24 hours, with the platform generating significant cash flows at scale, according to DefiLlama data.