In a significant departure from its previous strategy, Pump.fun, a Solana-based token issuance launchpad, has announced that it will no longer allocate 100% of its revenue to buying and burning its native token, PUMP. Instead, the platform will adopt a 50/50 split, where half of its net revenue will be used for token buybacks and the remaining half will be retained for operational expenses, product development, hiring, marketing, and potential acquisitions. This change in strategy comes after a review of the previous approach, which had been in place for nine months, revealed that it was not yielding the desired results.
During this period, Pump.fun had burned approximately 36% of PUMP's circulating supply, which is one of the largest single-event supply reductions in crypto history. The company's co-founder, Alon Cohen, explained that the change is necessary to ensure the long-term sustainability of the business.
The new strategy will see half of the revenue from Pump.fun's core products - the bonding curve, PumpSwap, and Terminal - being channeled into an irreversible smart contract that will automatically buy and burn PUMP tokens on the open market for the next year. The price of PUMP has shown a positive response to the announcement, rising by 6.9% in the 24 hours following the news. According to DefiLlama data, Pump.fun's annualized fees stand at $802 million, with revenue at $416 million, making it one of the rare crypto projects generating substantial cash flows at scale.