Lede
Alon Cohen, the co-founder of the Solana-based memecoin launchpad Pump.fun, has announced a significant overhaul of the platform’s creator fee system. This decision follows an internal assessment concluding that the existing model may have inadvertently skewed incentives among market participants. According to Cohen, the Dynamic Fees V1 system, which was introduced several months ago, succeeded in driving immediate activity but ultimately failed to produce sustainable market behavior. The previous mechanism was found to encourage low-risk token creation, which often occurred at the direct expense of high-risk trading activities.
The leadership at Pump.fun has described the previous trend as dangerous because traders represent the core source of liquidity and volume for the platform. By acknowledging that creator fees need to change, the launchpad aims to align its economic structure with the long-term health of the ecosystem. The overhaul is designed to move away from a model that prioritized the sheer volume of new tokens over the development of robust and liquid markets. This shift represents a pivotal moment for the Solana-based launchpad as it seeks to rectify structural weaknesses identified during its rapid growth phases earlier in the year.
Context
Pump.fun has established itself as the leading launchpad for Solana memecoins by combining near-frictionless token creation with a standardized route to liquidity. During its operation, the platform experienced significant growth, with bonding curve volumes more than doubling during a specific period of intense onchain activity. However, this surge in volume exposed certain structural weaknesses in how incentives were distributed. While creator fees were originally intended to support serious project tokens with active development teams, they frequently acted as a blunt incentive for average deployers to mint tokens rather than focus on building liquid markets.
This incentive structure led to a suboptimal user experience where participants were often required to conduct community takeovers or trust third parties to fulfill promises. The platform’s market position has not been without challenges; in July, a rival named LetsBonk briefly overtook Pump.fun in both volume and revenue. To reinforce its dominant position, Pump.fun engaged in aggressive PUMP token buybacks and launched a revamped creator payout program under the name Project Ascend. These efforts helped the platform maintain its status as the primary destination for memecoin launches within the Solana ecosystem, even as market dynamics shifted.
Impact
The first phase of the platform’s overhaul introduces a new creator fee-sharing mechanism designed to give teams more control over their revenue. Under this system, creators and community takeover (CTO) administrators will have the ability to allocate specific percentages of fees to as many as 10 different wallets following a token launch. This update is intended to reward various stakeholders and support collaborative project development. Furthermore, teams will now be able to transfer coin ownership and revoke update authority, providing a more robust framework for project governance and security on the platform.
Alon Cohen emphasized that the Pump.fun team will not accept any fees under this new system, describing the feature as being specifically for the “trencher” community. Fees generated through this mechanism will remain claimable by the designated recipients at any time and will not be forfeited if they are left unclaimed for an extended period. By allowing for more granular distribution of fees and providing tools for ownership transfer, Pump.fun aims to foster a more professional environment that encourages builders to stay engaged with their projects long after the initial minting process is complete.
Outlook
The overhaul of the creator fee system is part of a broader strategy to ensure Pump.fun remains the dominant Solana memecoin launchpad by prioritizing market quality over quantity. By shifting focus toward traders—who Cohen identifies as the core source of liquidity and volume—the platform seeks to foster more sustainable market behavior. This move is expected to reduce the incentive for rapid, low-risk token minting and instead encourage the development of liquid markets that can provide a better experience for all users. The platform’s history of adapting to competition, such as its recovery following the rise of LetsBonk in July, suggests a strong focus on maintaining market share through structural adjustments.
As these changes are implemented, the platform will continue to leverage its existing strengths, including the momentum gained from Project Ascend and its aggressive PUMP token buyback strategies. The transition to a more flexible fee-sharing model is intended to fix the “skewed incentives” that previously hindered long-term market depth. By providing creators and community administrators with the tools to manage ownership and revenue distribution more effectively, Pump.fun aims to create a more resilient trading environment that can withstand the inherent volatility of the memecoin sector while continuing to lead the Solana ecosystem.
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