In a significant change of strategy, Pump.fun, a Solana-based token issuance launchpad, has announced that it will no longer allocate all its revenue towards 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, including product development, hiring, marketing, and potential acquisitions. This new approach replaces the previous policy, which was in place for nine months and saw every dollar of revenue funneled into buying and burning PUMP tokens.
The move is aimed at ensuring the long-term sustainability of the platform, with co-founder Alon Cohen emphasizing the need for a more balanced approach to maintain the company's growth and competitiveness. Over the past nine months, Pump.fun has burned approximately 36% of the circulating PUMP tokens, which is one of the largest single-event supply reductions in crypto history.
The new policy will see half of the revenue from Pump.fun's core products, including the bonding curve, PumpSwap, and Terminal, being allocated to an irreversible smart contract that will automatically buy and burn PUMP tokens on the open market. The other half will be used to drive business growth and expansion. The change in strategy comes as PUMP's price has struggled to gain traction, trading sideways below its launch valuation despite the significant token burn. However, with the new policy in place, the company is optimistic about its future prospects, with Cohen stating that the move will enable Pump.fun to thrive for decades to come.
The market has responded positively to the announcement, with PUMP's price 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 few crypto projects generating substantial cash flows at scale.