【Block Rhythm】Pump.fun announced on January 10th a restructuring of its creator fee mechanism, a move that reflects an interesting market dilemma behind it.
Co-founder Alon Cohen candidly pointed out the problem. While the current Dynamic Fees V1 mechanism dramatically boosted platform activity in the short term, from a longer time perspective, it “may have distorted the incentive structure” and failed to establish sustainable market behavior patterns. In plain terms, this mechanism encouraged creators to issue tokens with low risk in bulk, while actually suppressing the high-risk but truly needed trading activity for the platform.
Cohen further explained the problems with this structure: “Traders are the core source of platform liquidity and transaction volume, this structure is dangerous.” An ecosystem lacking traders is ultimately flawed.
Looking back at the period when the mechanism went live was indeed quite impressive. New creators flocked in, generating buzz through live streaming and other means, and Pump.fun’s bonding curve trading volume doubled within weeks at one point. The on-chain environment was incredibly robust during that time. But the hype, like all speculative booms, came quick and left just as fast, and the problems that subsequently emerged became unavoidable.
As a Phase 1 adjustment solution, Pump.fun introduced a creator fee distribution mechanism. This mechanism allows creators or community takeover (CTO) administrators to flexibly allocate fees proportionally to up to 10 wallets after token launch. It also supports operations like transferring token ownership and revoking update permissions.
Cohen particularly emphasized one point: Pump.fun team members will not collect creator fees under any circumstances. This feature is purely designed to serve frontline players. Fees can be claimed at any time, and unclaimed fees won’t expire or become void. This design approach is actually quite sophisticated, giving creators full autonomy and flexibility.
Pump.funはクリエイター報酬メカニズムを再構築し、共同創設者が短期的な繁栄の背後にあるインセンティブの罠を分析する
【Block Rhythm】Pump.fun announced on January 10th a restructuring of its creator fee mechanism, a move that reflects an interesting market dilemma behind it.
Co-founder Alon Cohen candidly pointed out the problem. While the current Dynamic Fees V1 mechanism dramatically boosted platform activity in the short term, from a longer time perspective, it “may have distorted the incentive structure” and failed to establish sustainable market behavior patterns. In plain terms, this mechanism encouraged creators to issue tokens with low risk in bulk, while actually suppressing the high-risk but truly needed trading activity for the platform.
Cohen further explained the problems with this structure: “Traders are the core source of platform liquidity and transaction volume, this structure is dangerous.” An ecosystem lacking traders is ultimately flawed.
Looking back at the period when the mechanism went live was indeed quite impressive. New creators flocked in, generating buzz through live streaming and other means, and Pump.fun’s bonding curve trading volume doubled within weeks at one point. The on-chain environment was incredibly robust during that time. But the hype, like all speculative booms, came quick and left just as fast, and the problems that subsequently emerged became unavoidable.
As a Phase 1 adjustment solution, Pump.fun introduced a creator fee distribution mechanism. This mechanism allows creators or community takeover (CTO) administrators to flexibly allocate fees proportionally to up to 10 wallets after token launch. It also supports operations like transferring token ownership and revoking update permissions.
Cohen particularly emphasized one point: Pump.fun team members will not collect creator fees under any circumstances. This feature is purely designed to serve frontline players. Fees can be claimed at any time, and unclaimed fees won’t expire or become void. This design approach is actually quite sophisticated, giving creators full autonomy and flexibility.