Pump.fun, a Solana-based token issuance launchpad, has been operating under a straightforward model where every dollar of revenue was dedicated to buying and burning its native token, PUMP. Theoretically, this continuous supply reduction was intended to steadily drive up the token's price and align its value with the platform's success. However, after reviewing the previous policy, the company has decided to make a change.
In a recent announcement, Pump.fun revealed that it would be adopting a new 50/50 revenue split. Under this new model, half of the net revenue generated from the company's core products - the Pump.fun bonding curve, PumpSwap, and Terminal - will be allocated to an irreversible smart contract that automatically buys PUMP on the open market and burns it over the next year. The remaining half will be retained by the company to fund product development, hiring, marketing efforts, and potential acquisitions. Prior to this change, the company had been allocating 100% of its revenue to token buybacks, resulting in the burning of approximately 36% of PUMP's circulating supply over the past nine months.
This significant reduction in supply is one of the largest single-event supply reductions in crypto history. According to Co-founder Alon Cohen, the decision to split revenue was necessary to ensure the long-term sustainability of the platform.
Despite generating over $1 billion in lifetime revenue and using 100% of revenue for token buybacks, PUMP's price has remained stagnant, trading sideways below its launch valuation for most of 2026. The new strategy marks a turning point for Pump.fun, as the company seeks to balance token buybacks with operational costs to drive growth and expansion.
While some may view this change as a bearish sign, given the cyclical nature of memecoin launchpad volume, others see it as a bullish development. By locking 50% of future revenue into token buybacks, Pump.fun is effectively reducing the circulating supply of PUMP, which could lead to a more bullish setup for the token in the long run. In the 24 hours following the announcement, PUMP's price rose by 6.9%, with the token's annualized fees and revenue standing at $802 million and $416 million, respectively, according to DefiLlama.