Pump.fun, a Solana-based meme-coin platform, announced its revamp of the creator fee model, spearheaded by co-founder Alon, aiming to shift incentives towards active trading.
The revamped fee model addresses skewed incentives, enhancing liquidity and price discovery. PUMP token saw a 10–11% price increase post-announcement, indicating positive market sentiment.
Pump.fun has acknowledged that its current creator fee model distorted incentives, leading to low-risk token launches and diminishing trading activities. The revamped system aims to create a more trader-centric environment on Solana.
The fee system overhaul is spearheaded by Alon, founder of Pump.fun, who previously developed the Dynamic Fees V1 model. The new structure places greater emphasis on trading, reallocating creator fees to improve market dynamics.
“Creator fees may have skewed incentives away from traders, and we are revamping the system to restore a healthier market balance.” — Alon, Founder, Pump.fun
PUMP Price Rises 10-11% Amid Model Overhaul
The overhaul has led to an approximate 10-11% increase in PUMP’s price as traders react to the new fee model. Community sentiment shows heightened interest, reflected through immediate trading activity.
Potential regulatory or financial outcomes of the change remain speculative. However, increased trading may improve liquidity and price discovery on Solana, encouraging a shift away from low-effort token launches.
Trader Rewards: A Shift in DeFi Strategy
Previous similar restructurings in DeFi often involved shifting focus from creator fees to trader rewards. Pump.fun’s historical use of Dynamic Fees V1 similarly attempted to reward serious projects, but required a correction.
Kanalkoin experts anticipate the revised model can restore market balance and spur long-term value creation for meme-coins on Solana, reflective of trader engagement and liquidity trends seen in past DeFi projects.
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