Pump.fun, a Solana-based token issuance platform, is making a significant change to its revenue allocation model. Previously, the company had been dedicating 100% of its revenue to buying and burning its native token, PUMP, in an effort to support the token's price and align its value with the platform's success. However, after reviewing the effectiveness of this strategy over the past nine months, the company has decided to adopt a new approach.
Going forward, Pump.fun will split its revenue evenly between token buybacks and operational costs, including product investment, hiring, marketing, and potential acquisitions. This change is intended to ensure the long-term sustainability of the platform. The previous policy had resulted in the burn of approximately 36% of PUMP's circulating supply, with the tokens being permanently removed from circulation. The new strategy aims to strike a balance between supporting the token's price and investing in the growth and development of the platform.
According to Co-founder Alon Cohen, this change is necessary to ensure the platform's survival and success over the long term. The move has been prompted by the company's revenue growth, which has exceeded $1 billion in lifetime revenue, but has been experiencing a decline in recent months. The new strategy is expected to have a positive impact on the token's price, as the reduced supply and ongoing burns will contribute to a more bullish market outlook.