Pump.fun reforms the creator fee mechanism, reflecting a deep reconsideration of the incentive system.

Pump.fun announced the launch of a creator fee sharing feature on January 12, allowing fees to be distributed to up to 10 wallets, while creators can transfer token ownership and revoke update permissions. This seems like a simple feature update, but in reality, it reflects a re-evaluation of this top meme coin platform on Solana regarding its own incentive mechanisms.

Acknowledgment of the Underlying Issues

According to the latest news, Pump.fun co-founder Alon Cohen openly pointed out the core problems with the current mechanism. The platform previously implemented the Dynamic Fees V1 system, which boosted activity in the short term—trading volume doubled, attracting many new creators—but in the long run, this set of rules distorted incentives.

What are the specific issues?

• Over-incentivizing token creation rather than high-risk trading activities
• Creators issuing tokens just to issue, leading to a flood of low-quality projects
• Traders (the platform’s true backbone) being “held back,” with insufficient liquidity depth
• Creator fees lacking practical functions and not helping creators monetize effectively

The most direct manifestation of this imbalance is that the daily issuance of tokens on the platform hit a new high since September last year (nearly 30,000 tokens), but trading depth and project quality did not improve in tandem.

How the New Feature Improves the Situation

Pump.fun’s fee sharing feature introduces several core improvements:

Flexible fee distribution

Creators can now allocate fees to up to 10 wallets, which means:

• Creators can set multiple beneficiaries (e.g., core team members, community funds, marketing partners)
• Fee distribution becomes more transparent and customizable
• Creators have more revenue opportunities and distribution autonomy

Ownership and permission management

Transferring token ownership and revoking update permissions reflect several intentions:

• Creators can gradually delegate authority to the community, achieving decentralized governance
• Project teams can clearly define permission boundaries, enhancing community trust
• This is crucial for creators aiming to build sustainable projects

Platform attitude shift

It’s worth noting that Pump.fun emphasizes that the team itself takes no cut, and all fees go entirely to creators and the community. This indicates a shift from a “cut-taking model” to an “infrastructure service” approach.

The Deeper Significance of This Reform

From an industry perspective, this reform reflects a key upgrade in the understanding of meme coin platforms:

Short-term hype and long-term ecology are two different things. Pump.fun admits that while Dynamic Fees V1 boosted short-term heat, it did not establish a sustainable incentive mechanism. The current reform signals: we don’t want unlimited token issuance, but a quality creator ecosystem.

Traders are the core of the platform. The new mechanism shifts focus from “issuance incentives” to “trading incentives and creator monetization,” which is a healthier balance.

Power decentralization to the community. Allowing creators to manage ownership and permissions essentially puts the future of the project in the hands of the community rather than the platform, which is key to building trust.

Possible Future Changes

Based on the direction of this reform, we can anticipate:

• In the short term, some low-quality projects relying on fee mechanisms to “harvest” users may face pressure
• In the medium term, projects with genuine community support will gain better incentives
• In the long term, Pump.fun may attract more creators interested in building sustainable projects rather than quick cash-outs

According to related reports, large funds are quietly positioning themselves in some established meme coins, indicating that smart money is preparing for opportunities after ecosystem optimization.

Summary

Pump.fun’s reform is essentially a “self-correction.” Starting from acknowledging issues, the platform has introduced more flexible fee sharing and permission management mechanisms, aiming to find a new balance between creator incentives and trading depth. This is not just a simple feature update but a rethinking of the sustainability of meme coin platforms. For creators, the new system offers more revenue opportunities and autonomy; for the platform, it marks a shift from chasing hype to building a healthy ecosystem. How it will be executed and how the market will respond remain to be seen.