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

【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.