In a significant strategic shift, Solana-based token launchpad Pump.fun is abandoning its previous model of dedicating all revenue to buying and burning its native token, PUMP. This approach, in place for nine months, aimed to reduce the token's supply and theoretically boost its price by aligning the token's value with the platform's success. However, a review of this policy has led the company to adopt a new strategy, splitting its revenue evenly between token buybacks and operational costs. Half of the revenue from the platform's core products - the Pump.fun bonding curve, PumpSwap, and Terminal - will now be channeled into an irreversible smart contract designed to automatically purchase and burn PUMP tokens on the open market for the next year.
The other half will be retained by the company to fund product development, hiring, marketing efforts, and potential acquisitions. This change follows the burn of approximately 36% of PUMP's circulating supply over the past nine months, a move that constitutes one of the largest single-event supply reductions in cryptocurrency history. According to Co-founder Alon Cohen, this strategic adjustment is necessary for the long-term sustainability of Pump.fun, enabling the company to invest in its growth and ensure its viability for decades to come.
The decision is partly driven by PUMP's price performance, which has largely traded sideways below its launch valuation in 2026, despite the previous buyback strategy and over $1 billion in lifetime revenue. The new approach has both bullish and bearish implications. On one hand, the reduced revenue allocation to token buybacks could result in smaller burns, especially considering the cyclical nature of memecoin launchpad volume.
On the other hand, the permanent removal of a significant portion of PUMP's supply could lead to a bullish setup, especially if demand remains steady. The market has initially responded positively, with PUMP rising 6.9% in the 24 hours following the announcement.
With annualized fees of $802 million and revenue of $416 million, according to DefiLlama, Pump.fun is among the rare crypto projects generating substantial cash flows at scale.