Fee Model Revisions Announced by Pump.fun Co-Founder

Summary: Alon, co-founder of Pump.fun, has acknowledged that the platform's current creator fee mechanism has fallen short, prompting a significant redesign aimed at empowering traders to select which tokens receive revenue-sharing benefits. This announcement comes amid legal challenges and dwindling market share as the platform seeks to balance the interests of creators and traders.

Key Takeaways

Pump.fun co-founder Alon admits the creator fee model has failed to yield sustainable results.
A revamp of the system will allow traders to choose which tokens should receive revenue-sharing arrangements.
The current model attracted creators but discouraged trading, leading to an imbalanced ecosystem.
There has been community backlash against the current fee structure, with suggestions for alternative approaches.
The platform is facing growing legal troubles, with allegations of unfair practices and misleading launches.

Pump.fun Co-Founder Says Fee Model Failed, Announces System Revamp

Introduction to Pump.fun's Revamp

Pump.fun's co-founder Alon has recognized that the platform's creator fee model has struggled to provide lasting success, necessitating a comprehensive system overhaul. This new approach will offer traders the power to decide which tokens are worthy of revenue-sharing arrangements, addressing concerns about creator incentives while also enhancing trader involvement.

Despite a recent uptick in trading activity, it remains far from the levels seen previously. Among the initial changes introduced is a fee-sharing feature that enables creators to allocate revenue among multiple wallets, transfer coin ownership, and modify update authority.

The Flaws of Dynamic Fees

Alon elaborated that the Dynamic Fees V1, which launched several months ago, initially appeared to attract attention from creators unfamiliar with cryptocurrency applications. He remarked that within a short time, more creators began organically launching coins and utilizing the platform for streaming.

This surge in activity resulted in doubled bonding curve volumes shortly after the fee structure's introduction. However, the model inadvertently created an imbalanced ecosystem, promoting low-risk coin creation to the detriment of high-risk trading.

Alon emphasized the importance of traders, declaring that they are essential to the platform's success. He noted that while creator fees can be useful for promoting quality project tokens, they ultimately hinder a positive user experience. The proposed new system will adopt a market-based perspective, allowing traders to determine whether a specific narrative warrants creator fees and how these should be allocated.

Looking ahead, Alon expressed excitement for potential developments in 2026.

Community Reactions to the Changes

This announcement has sparked significant criticism in the crypto community, with many industry observers questioning if these new changes address the underlying issues. For instance, blockchain developer Unihax0r described the update as insincere, insisting that what was presented effectively changed nothing. He called for a launchpad that prioritizes user benefits over creator profits.

Critics have argued that renaming fees as "creator fees" is misleading. Unihax0r asserted that those who deploy tokens do not produce value and ought to be labeled as "extractors." He pointed out that deployers often use automated tools to create numerous tokens with little effort, raising concerns about their disproportionate advantages on the platform.

Another user, “Patience,” suggested a more straightforward fix, proposing a reduction of creator fees to zero until a token reaches significant market capitalization, combined with a small fee for coin deployment to streamline the process.

In contrast, “Easy” from K9 Strategy argued that the reassignment of fees could lead to unwelcome scenarios where deployers pressure users into supporting tokens they never intended to launch.

Legal Challenges and Treasury Issues

Amidst these developments, Pump.fun is also facing increasing legal scrutiny. A U.S. federal judge recently permitted plaintiffs in a class-action lawsuit to introduce around 5,000 internal chat messages against Pump.Fun and other entities, alleging they formed a coordinated enterprise that prioritized insiders in token launches.

The lawsuit claims that while the platform promoted its token launches as fair, it secretly endorsed transaction-order manipulation. Furthermore, court filings have estimated that the platform generated over $722 million in revenues while causing substantial losses—between $4 billion and $5.5 billion for retail traders.

Additionally, co-founder Sapijiju has dismissed claims regarding a withdrawal of $436 million in USDC, labeling the allegations as "complete misinformation" and asserting that the associated transfers were standard treasury management practices.