Solana-based memecoin launchpad Pump.fun is overhauling its incentive structure, introducing a trader-focused cashback model in a bid to rebalance rewards and address mounting criticism over profitability on the platform.
In an announcement on X, Pump.fun said token creators must now choose between its traditional Creator Fees model or a new Trader Cashback option before launching a coin. The decision is final and cannot be changed post-launch.
Under the original structure, creators earned 0.3% of all trading fees generated by their tokens. At its peak, the model helped Pump.fun generate more than $15 million in a single day. But critics argued that the system disproportionately rewarded deployers, even when projects lacked meaningful development or community stewardship.
Redirecting incentives toward traders
The newly introduced Cashback Coins are generated on every trade and can be accessed through Terminal, Pump.fun’s native trading interface. Instead of channeling fees to deployers, the cashback model distributes rewards to traders who actively participate in the market.
Pump.fun said the change recognizes that many successful memecoins emerge organically, without a formal team, and that rewarding deployers by default does not always reflect where value is created.
The shift effectively hands pricing power and reward allocation to the market. Traders can gravitate toward tokens that offer cashbacks, while creators who believe in their projects may still opt for the traditional fee structure.
The update comes as sentiment around memecoins appears to be stabilizing. Onchain analytics firm Santiment recently described the widespread narrative that the “meme era” is over as a potential capitulation signal — often a precursor to renewed interest in risk-heavy sectors.
Declining revenues pressure the model
Pump.fun’s fee revenues have cooled sharply from their 2025 highs. The platform generated $31.8 million in fees in January, down 75.6% from the $148.1 million recorded in January 2025 — its strongest month on record. February has so far trailed even further behind.
At the same time, profitability on the platform has remained highly uneven. Data from Dune Analytics shows that out of 58.7 million wallets interacting with Pump.fun, only a small fraction posted meaningful gains. Fewer than 14,000 wallets reached millionaire status, while millions saw limited or no profits.
The new rewards structure appears designed to address those concerns, although some community members question whether reducing creator incentives could dampen the pipeline of new launches. As one user noted, the most lucrative period for deployers typically occurs when tokens are still on Pump.fun and generating peak trading volume.
Monthly change in Pump.fun fees since March 2024. Source: DeFiLlama
Creator rewards under scrutiny across the industry
Pump.fun’s adjustment comes amid a broader rethink of incentive programs across crypto platforms. Earlier this month, Coinbase’s Base app discontinued its Creator Rewards initiative, which had paid roughly $450,000 to 17,000 creators over seven months. The program averaged about $26 per creator, underscoring the challenges of sustaining meaningful social-based reward systems at scale.
The memecoin sector remains highly cyclical, driven by bursts of speculative activity rather than long-term fundamentals. Whether Pump.fun’s cashback model can foster more durable engagement — or simply reshuffle incentives — will likely depend on sustained user demand and market volatility.