Pump.fun Rejiggers MemeCoin Fees to Reward Traders, Not Just Creators

Pump.fun, the Solana-based memecoin launchpad, is modifying its creator-fee structure to shift the focus from token creation to active trading. The platform aims to address the unintended consequences of its previous system, which may have encouraged low-risk creation over high-risk trading according to reports.

The platform's updated system allows teams to split creator fees among up to 10 wallets. It also introduces features like transferring coin ownership, revoking update authority, and assigning fee percentages post-launch. These changes are part of a broader effort to align incentives with the health of the platform.

Pump.fun co-founder Alon Cohen acknowledged that the previous system, Dynamic Fees V1, successfully attracted new creators but failed to influence the behavior of average users. "Creator fees may have skewed incentives toward low-risk coin creation instead of high-risk trading," he wrote. The new model aims to correct this imbalance by empowering traders.

Why Did This Happen?

Dynamic Fees V1 was introduced to encourage more successful token launches and increase on-chain activity. However, it was found that the model incentivized creation over trading, which is critical for platform sustainability.

The initial fee structure led to a surge in new token launches but did not sustain long-term platform engagement. As a result, the Pump.fun team decided to implement a revised model that better aligns with the goals of the broader community.

Pump.fun's native token has shown signs of renewed interest, with a 42.2% increase in value in the last week. This reflects growing confidence in the platform's ability to adapt.

The Solana memecoin market has also shown strength, with trading volumes and token valuations rising. For example, Bonk surged 50% in a week, and other tokens like PENGU and FARTCOIN also saw significant gains according to data.

The market response suggests that traders are willing to support platforms that foster active engagement.

What Are Analysts Watching Next?

Analysts are closely watching how the new fee structure impacts long-term platform engagement and liquidity. The success of the updated model will depend on whether it encourages sustained trading activity.

The broader Solana ecosystem is also gaining momentum, with stablecoin market capitalization reaching an all-time high of $15 billion. This indicates a strong inflow of capital into the network.

The next steps for Pump.fun will focus on implementing market-based approaches that allow traders to determine the value of creator fees. This shift aims to create a more balanced and sustainable ecosystem.

As the platform moves forward, it will be important to monitor how these changes affect user behavior and overall platform health.