Meme Coin Launchpad Pump.fun Moves to Rebalance Creator and Trader Incentives

Pump.fun, the Solana-based memecoin launchpad, has announced updates to its creator-fee model to better align incentives between creators and traders. The new system allows creators to distribute fees across up to 10 wallets and assign specific fee percentages post-launch.

The platform's co-founder, Alon Cohen, stated that the previous Dynamic Fees V1 structure skewed incentives toward low-risk token creation and away from high-risk trading, which is critical for maintaining platform activity.

With nearly 30,000 token launches reported in a single day, the platform is experiencing a renewed surge in activity.

Why Did This Happen?

The Dynamic Fees V1 system, introduced last year, aimed to improve outcomes for high-quality token projects by offering creator incentives. However, it was found to have limited impact on average memecoin deployers.

Pump.fun's analysis found that while the model attracted new creators, it did not significantly alter the behavior of typical users.

The fee system was also criticized for encouraging token creation over trading, which led to an imbalance in the platform's ecosystem.

How Did Markets Respond?

Pump.fun's native token, PUMP, saw a price increase of nearly 10% following the announcement.

The launchpad reported $6.6 billion in weekly trading volume, reflecting strong user participation.

Despite the price rise, PUMP remains significantly below its all-time high, highlighting the volatility of the market.

The platform has spent over $236 million on buybacks since August 2025, absorbing nearly 18% of the circulating supply.

What Are Analysts Watching Next?

Cohen emphasized that future updates will allow traders to determine whether a token narrative justifies creator fees.

The co-founder also stated that no members of the Pump.fun or Terminal team will accept creator fees, ensuring that the system is user-driven.

Analysts are watching how the new model affects long-term sustainability and whether it can encourage more traders to participate in the platform.

The market-based approach is expected to shift the platform's focus from token creation to trading activity, which is considered the lifeblood of the ecosystem.

Pump.fun's updated fee-sharing model is part of a broader strategy to improve market health and create a more balanced environment for both creators and traders.