Pump.fun Co-Founder Admits Fee Model Failed, Announces Major System Overhaul
Pump.fun—the memecoin launchpad that became a Solana sensation—just hit a major reset button. Its co-founder dropped a bombshell admission: the platform's fee structure didn't just underperform; it failed. Now, a complete system revamp is on the table, signaling a dramatic pivot for one of crypto's most viral playgrounds.
The Fee Fiasco: What Went Wrong?
The model was simple: charge a small fee on every trade to fund platform operations and rewards. In theory, it aligned incentives. In practice? It created friction just as users demanded frictionless launches. Volume migrated to newer, leaner competitors. The co-founder's statement was blunt—the economics didn't scale, and the community felt the pinch. Another case of over-engineering a tax before proving the value, a classic move in the 'extract-first, ask-questions-later' school of crypto finance.
Blueprint for the Revamp
Details are still emerging, but the overhaul focuses on sustainability without stifling growth. Expect a streamlined fee system—possibly even temporary fee waivers to regain momentum. The infrastructure is getting a rebuild too, aiming for faster launches and tighter security. It's not just a tweak; it's a foundational rethink of how a launchpad should operate in a market that hates unnecessary costs.
Why This Matters for the Memecoin Machine
Pump.fun's stumble isn't isolated. It highlights a broader tension in decentralized finance: balancing monetization with community growth. When fees become a barrier, users vote with their wallets—and they're notoriously fickle. This revamp is a bet that returning to a user-first, lightweight model can reclaim lost ground. Whether it works will depend on execution, not just announcements.
The move is a stark reminder: in crypto, even the hottest platforms aren't immune to flawed economics. Sometimes, the smartest contract in the room is the one that knows when to tear up the old blueprint and start fresh.
Dynamic Fees Drew Creators But Discouraged Trading
Alon explained that Dynamic Fees V1, launched months earlier, appeared initially successful, attracting creators who had never used crypto applications.
“Only a week later, the potential of the mechanism showed: more and more creators—many of which have never touched a crypto app before—began organically launching coins and streaming on the platform,” he wrote.
The streaming Meta that followed doubled platform activity, with bonding curve volumes surging 2x within weeks of the fee structure’s implementation.
However, the model created an imbalanced ecosystem by incentivizing low-risk coin creation over high-risk trading activity.
“” Alon wrote, noting that successful tokens require environments where market participants provide liquidity, generate volume, and take risk.
He added that “creator fees may have skewed the incentive for users to engage in low-risk activity (coin creation) instead of high-risk activity (trading), which is dangerous.“
Alon acknowledged that creator fees “are a great tool to incentivize high-quality Project Tokens” but admitted the platform “fails at providing a good user experience” for narratives that could use fees to raise project ceilings.
The new system will implement “a market-based approach, and let traders decide whether a narrative truly deserves Creator Fees, and how those should be used.”
He concluded on an optimistic note, stating that he is “.”
Community Backlash Against Creator Fee Structure
The announcement drew sharp criticism from industry observers who questioned whether the changes addressed fundamental problems.
Unihax0r, a blockchain developer, dismissed the update as gaslighting, writing: “All this message to announce: nothing. The trenches need their Hyperliquid moment. We need a launchpad as a public good, where 99% of the value is redistributed to users.“
He criticized Pump.fun for renaming taxes as creator fees, arguing that “people who deploys are not ‘creators’. They don’t create anything valuable, if anything it should be called Extractor fees.“
Unihax0r claimed that deployers use industrialized tools that launch thousands of tokens “” while collecting substantial revenue with minimal effort, questioning why the platform “gives them the most upside” when “they NEED 10k deploys a day.“
All this message to announce: nothing
The trenches need their Hyperliquid moment. We need a launchpad as a public good, where 99% of the value is redistributed to users
We bullied to hell all developers on previous chain for having 5/5 taxes on memes coins and we got absolutely… https://t.co/ytHd5nJMOq
A user with the X name of “Patience” proposed a simpler solution: “creator fees to 0% until a coin hits 1m+ mc, charge like 3 to 5 SOL to deploy a coin = problem solved.“
Meanwhile, “” from K9 Strategy compared the changes unfavorably to the Bags app, arguing that the fee reassignment feature WOULD incentivize deployers to assign fees to unwilling recipients, creating pressure campaigns in which “a bunch of bag holders bother the ever living hell out of that person” to acknowledge tokens they never intended to launch.
Growing Legal Troubles and Treasury Controversy
Amid all these uncertainties brewing around the platform, a U.S. federal judge in December allowed plaintiffs to add nearly 5,000 internal chat messages to a class-action lawsuit accusing Pump.Fun, Jito Labs, and solana Foundation entities are operating a coordinated enterprise that gave insiders priority access to newly launched tokens.
Judge Colleen McMahon granted permission to amend the complaint with evidence from a whistleblower who resurfaced in September.
Over 5,000 internal https://t.co/BB5leCKHRh chats surface, allegedly showing developers and bots coordinating trades and block timing. Lawsuit heats up!#MEV #PumpFunhttps://t.co/sXWtN893la
The lawsuit alleges that the defendants marketed launches as fair while secretly enabling transaction-order manipulation through maximal extractable value practices.
Court filings estimate the platform generated over $722 million in revenue while inflicting between $4 billion and $5.5 billion in losses on retail traders.
Separately, co-founder Sapijiju pushed back against allegations of a $436 million USDC cash-out, calling the claims “” and describing the transfers as routine treasury management.
