Solana-based Launchpad Pump.fun Looks to Revamp Creator Fees Amid Market Rejuvenation

Memecoin launchpad Pump.fun is set to change its Creator fees model. The co-founder, Alon, disclosed this on X, noting that the model had not delivered the expected results.

Alon stated the goal of the Dynamic Fees V1 was to incentivize project founders to launch projects on Pump.fun.  However, he noted that it was unsustainable in the end, hence the need for change.

Pump.fun Co-founder Claims Dynamic Fees Did Not Encourage Trading

According to Alon, the major issue with the current creator’s fee model was that it disincentivized trading while encouraging token launches. This meant that more users were creating tokens, but fewer were trading them.

This defeats the whole purpose of introducing the model, which was to ensure successful projects on the platform. As the co-founder noted, trading is the lifeblood of the platform and crucial to Pump.fun achieving its mission.

He wrote:

“Pump fun’s mission is to create the best possible environment for coins to thrive, and successful tokens are much more likely to come about in an environment where traders are incentivized to participate in the market, provide liquidity, create volume, and take risk.”

Meanwhile, he also criticized the lack of utility for Creator fees on Pump.fun. He noted that Creator fees can be used for several purposes that would boost interest in a project and encourage those trading the tokens.

However, that has not happened so far due to the platform not having the user experience to enable this. It is possible that these features could be part of changes coming to Creator Fees

Interestingly, Alon did not share what the expected changes would be, despite stating that they would be major. However, he stated the platform would use a market-based approach and let traders decide what Creator fees are and how they should be used.

Mixed Reactions Trail Update as Amid Memecoin Sector Recent Resurgence

Meanwhile, community reaction to the announcement has been mixed, with many welcoming it as a positive development while others criticized it. Those in support noted that a potential change would be beneficial, even if the scope is unknown.

According to a user, it is essential that Pump.fun implement the changes as soon as possible, as the current model has been broken for some time.

Interestingly, some users criticized the post as not offering any new information. One user added that what Pump.fun calls Creator Fees should be called Extractor Fees because token deployers create no value.

Meanwhile, the planned changes by Pump.fun come after months of decline in memecoin activity. The sector has lost more than 60% of its value over the past year, which has also led to a decline in Pump.fun’s volume.

However, there are signs of a turnaround in recent times. According to CoinMarketCap, the market capitalization of the memecoin sector has increased by almost 7% over the past month.

This has also marked a turnaround for Pump.fun with the platform hitting a new all-time high in weekly trading volume with $6.6 billion last week. Still, it is unclear what is driving its trading volume, with speculation that it could be wash trading.

Whatever it might be, the Pump.fun token, PUMP, is now up 6% in the last 24 hours, even as it remains down 72% from its peak price.