Pump.fun admits creator fee mechanism causes "incentive distortion," plans comprehensive adjustments

BlockBeats News, January 10, Pump.fun announced that it will restructure its creator fee mechanism. Its co-founder Alon Cohen stated on X that although the current Dynamic Fees V1 has significantly increased platform activity in the short term, in the long run, it "may distort the incentive structure" and has failed to establish sustainable market behavior.

Cohen pointed out that this mechanism encourages a large number of low-risk token issuances, but suppresses high-risk trading activities that are crucial to the platform. "Traders are the core source of platform liquidity and trading volume, and this structure is dangerous," he said.

He recalled that the mechanism had a significant effect in its early stages, with many new creators joining and driving hype through live broadcasts and other means. Pump.fun's bonding curve trading volume doubled within weeks, creating one of the strongest on-chain environments in early 2025. However, the boom quickly faded, exposing structural issues.

As the first phase of adjustment, Pump.fun will launch a creator fee sharing mechanism, allowing creators or community takeover (CTO) administrators to distribute fees proportionally to up to 10 wallets after token launch; it will also support transferring token ownership and revoking update permissions. Cohen emphasized that Pump.fun team members will never collect creator fees under any circumstances. This feature is "entirely for frontline players," fees can be claimed at any time, and unclaimed fees will not expire.