Pump.fun reconstructs the creator fee mechanism; co-founders analyze the incentive traps behind short-term prosperity

NullWhisperer · 2026-01-10T08:52:13+00:00

Pump.fun will overhaul the creator fee mechanism on January 10th to address the incentive structure distortions caused by the current Dynamic Fees V1. Although this mechanism temporarily boosts activity, it lacks long-term appeal to traders, affecting the platform's sustainable development. The new mechanism allows creators to flexibly allocate fees, enhancing their autonomy and aiming to improve the platform ecosystem.

NullWhisperer

2026-01-10 08:52:13

Abstract generation in progress

【Blockchain Rhythm】Pump.fun announced on January 10th a restructuring of its creator fee mechanism, reflecting an interesting market dilemma behind this move.

Co-founder Alon Cohen candidly pointed out the problem. While the current Dynamic Fees V1 mechanism significantly boosted platform activity in the short term, from a longer-term perspective, it “may distort the incentive structure” and has not established a sustainable market behavior model. In simple terms, this mechanism encourages creators to issue tokens in large quantities with low risk, which in turn suppresses high-risk trading activities that the platform truly needs.

Cohen further explained the issue with this structure: “Traders are the core source of liquidity and trading volume for the platform, and this structure is dangerous.” An ecosystem lacking traders is ultimately flawed.

Looking back, the period when the mechanism was launched was indeed quite good. New creators flocked in, generating buzz through live streams and other methods. Pump.fun’s bonding curve trading volume once doubled within a few weeks. During that time, the on-chain environment was truly powerful. But like all speculative booms, the hype came quickly and went just as fast, exposing problems that could no longer be ignored.

As a first-phase adjustment plan, Pump.fun introduced a creator fee sharing mechanism. This allows creators or community-appointed (CTO) administrators to flexibly allocate fees to up to 10 wallets after the token goes live. It also supports operations like transferring token ownership and revoking update permissions.

Cohen emphasized that the Pump.fun team members will never charge creator fees under any circumstances. This feature is purely designed to serve frontline users. Fees can be claimed at any time, and if not claimed, they do not expire or become invalid. This design is quite thoughtful, giving creators full autonomy and flexibility.

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Liquidated_Larry

· 12h ago

Ha, are they going to change the mechanism again? After a short-term frenzy, they start fixing vulnerabilities... I've seen this routine too many times. Real traders are the true parents; a bunch of token creators are just riding the wave for hype. Pump.fun's realization now is indeed a bit late. When the incentive structure tilts, the ecosystem starts to decay. Can this change be done well this time? I remain skeptical. But on the other hand, if this adjustment can attract genuine traders to enter, there is still hope. Why does it feel like Web3 platforms are repeating the same mistakes... short-term data looks good but just inflates. Cohen's honesty this time is pretty good; at least he acknowledged the problem, much better than some project teams who stubbornly deny issues.

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DeFiChef

· 01-10 09:12

Another feast of "short-term prosperity," and it's time for settlement after eating. Pump.fun's recent mechanism change, to put it plainly, is like discovering you've bred a bunch of "coin minting machines," but trading volume has actually decreased... This logic is indeed ironic, as the incentives only attract creators who don't want to trade.

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StakeTillRetire

· 01-10 09:09

Haha, changing the mechanism again. This time, do you finally remember the traders? The previous system was just pure exploitation of creators.

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NFTRegretful

· 01-10 09:04

Haha, they’re changing the mechanism again. This is the fate of meme coin platforms. --- Short-term explosive growth, long-term hidden dangers. Pump.fun’s summary this time is quite honest. --- Traders are the real bosses; creators are just workers. It’s about time to recognize that. --- Low-risk coin issuance vs. high-risk trading. It’s all about playing with retail investors’ psychology. --- Honestly, it’s still about self-evolution; otherwise, you’ll be replaced by the next platform sooner or later. --- The term “incentive trap” is used perfectly. It really captures human greed tightly. --- Now that they’re changing the mechanism, what about the creators who benefited from the previous wave? So awkward. --- I just want to know if Cohen’s changes this time will go too far again. --- Without traders, the ecosystem is a dead end. I agree with this logic. --- It looks like a rebalancing is needed, but can it really be balanced...

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BagHolderTillRetire

· 01-10 09:03

Haha, they're changing the mechanism again. To be honest, the previous system was just too bloodsucking, focusing only on making creators mint coins like crazy, and traders got completely wiped out.

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NFTFreezer

· 01-10 08:57

Ha, it's expected that this fee mechanism will change too. It's satisfying in the short term, but it's a trap in the long run. Why is it again about encouraging token issuance to suppress trading... This logic is indeed reversed. Cohen is right; a platform without traders will eventually fail.

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