Compass Investments

Pump.fun co-founder, Alon, has admitted that the reward system for the platform’s developers has not yielded long-term results, prompting him to significantly redesign the model. As a result, traders themselves will be able to determine which tokens are worthy of royalties.

This comes amid growing legal pressure and loss of market share for memcoin startup Solana, which has been seeking a balance between developer motivation and trader engagement.

Although trading activity has picked up a bit in recent days, it has not yet reached its previous heights.

the first modifications the platform introduced through the reward distribution function, which allows developers to direct revenue to 10 wallets, transfer rights to coins and revoke permissions for updates.

This update is designed to address transparency issues, as token holders previously had to rely on developers to manually transfer commissions.

the payment model for creators needs to be adjusted.

When Dynamic Fees V1 was introduced months ago, the goal was to encourage more success stories in our field, motivating founders and teams of the best projects to launch their tokens on pump fun and succeed.

Alon explained that Dynamic Fees V1, introduced earlier, has worked well in attracting developers who have not used crypto applications at all.

Within a week, the power of this scheme became apparent as more and more developers – many of whom had no prior experience with crypto tools – began issuing coins on their own and streaming on the platform, he wrote.

” “.

The ensuing excitement on the streamers doubled the platform’s momentum, and turnover on the bond curve doubled in the weeks following the introduction of the bonus system.

However, this structure created an imbalance: it encouraged low-risk coin issuance rather than active trading activity.

“Traders are the heart and soul of the platform, Elon said, emphasizing that token success requires an environment where market participants provide liquidity, generate volume and take risks.

He added that “fees for creators could shift users’ incentives toward low-risk activities (coin creation) at the expense of high-risk activities (trading), which is undesirable.

Elon agreed that creator fees are “a great tool to support quality tokens for the project, but acknowledged that the platform “doesn’t provide the best user experience” for narratives that could benefit from such fees.

The new system will introduce a “market-driven approach and allow traders to determine whether a concept deserves developer contributions and how those funds should be used.

He concluded by expressing optimism, stating that he was very excited about what’s in store for us in 2026.

The statement drew sharp rebukes from industry analysts who questioned whether the changes would fix the underlying problems.

Blockchain developer Unihax0r called the update “gas education, writing: “This whole post is just to say: nothing new. The trenches need their own Hyperliquid. We need a launchpad as a public good where 99% of the cost is redistributed to the users.

He criticized Pump.fun for renaming taxes as creator fees, arguing that those who do the deployment are not creators. They don’t produce anything of value; they should be called miner fees.