Pump.fun Overhauls Fee System to Prioritize Trading Activity

• Pump.fun, the leading Solana-based memecoin launchpad, has announced changes to its fee structure to shift incentives from token creation to active trading, aiming to improve liquidity and price discovery.

• The new system introduces flexible fee sharing, allowing creators to distribute rewards among up to 10 wallets, and enables governance tools to align community and creator incentives.

• These updates come after analysis revealed that the previous model, which incentivized token creation, led to structural imbalances and weak trading activity, particularly after initial hype faded.

How Does the New Fee System Work?

Pump.fun's Dynamic Fees V1 model encouraged token issuance but failed to sustain long-term trading momentum, creating an environment where speculative behavior dominated. The updated framework introduces optional fee distribution, allowing creators and administrators to assign percentages directly. This change is expected to create a more balanced ecosystem where traders and builders share incentives.

The new system allows for

greater flexibility in ownership management, enabling creators to transfer token ownership and revoke permissions. This aligns with broader shifts in the memecoin sector toward structured trading environments and specialized tools.

What Does This Mean for Market Participants?

The shift from creation-based incentives to trading-based rewards is seen as a response to maturing market conditions. Pump.fun accounts for 75% to 80% of all Solana-based memecoin launches, and the new fee model reflects a broader industry trend of balancing speculation with structure.

For traders, this change may result in improved liquidity and more predictable price discovery. However, the platform still faces challenges in managing volatility and preventing manipulation, as seen in tokens like 114514, which experienced a 1700% surge followed by a 79% correction.

What Are the Risks of the New Model?

While the updated fee model aims to foster healthier market conditions, it remains to be seen whether it will effectively address the inherent volatility and speculative nature of memecoins. The success of the new framework depends on sustained trader participation and the ability to maintain a broad base of committed holders.

Moreover, the transition from a creation-based to a trading-based model may also impact the rate of new token launches. Critics have noted that the previous system encouraged low-risk creation but discouraged high-risk trading, which is essential for liquidity.

What's Next for Pump.fun and the Meme Coin Ecosystem?

Pump.fun has indicated that more updates are expected in the near future, with the goal of enhancing platform functionality and adaptability. The broader memecoin market is also evolving, with new infrastructure like MemeMax offering high-leverage decentralized trading tools tailored to the volatility and sentiment-driven nature of memecoins.

As the market continues to mature, platforms like Pump.fun will play a critical role in balancing innovation with structure. Whether the new fee model will succeed depends on how well it aligns incentives and supports long-term growth in a sector still largely driven by retail sentiment and social media narratives.