Pump.fun Burns $370M in Repurchased PUMP Tokens Amid Breakdown in Community Trust

• Pump.fun says that its community was losing trust in the platform’s longevity, which pushed it to the bold $370 million token burn.
• In the future, only 50% of its revenue will go to token buybacks, with the rest funding ecosystem developments and new projects.

Pump.fun, the Solana-based launchpad that launched memecoins like Fartcoin and Peanut the Squirrel, has permanently burned 36% of its circulating supply, worth $370 million, as it seeks to rebuild its divided community.

Announcing the burn, Pump.fun said the move aims at “gaining trust with our community.” The project currently has a circulating supply of 332.1 billion PUMP tokens, with the maximum supply capped at 1 trillion tokens.

The project also announced a new initiative to channel 50% of all revenue generated over the next year to purchasing tokens for the burn, claiming this would revive trust and predictability. It would also boost the PUMP price by slashing the supply. The token currently trades at $0.001838, and while it has gained 5.2% in the past 24 hours, it’s trading in the red in the past week.

The token has lost 79% of its value since last September, when an Upbit listing pushed its price to $0.008615. In the last three months alone, it has shed 32% of its value amid a broader bear market that has wiped out nearly $1 trillion since the end of January.

Pump.fun’s Struggle to Reunite its Community

Pump.fun has been buying back its PUMP tokens from the revenue generated from transaction fees for over nine months now. However, it says a lack of trust has hit its community, with many questioning the longevity of its business model as the market moves on from memecoins. Others expressed concerns over whether the buybacks were indeed happening and what the repurchased tokens would be used for.

This made the burn the best move for the community, the project says.

In addition to the burn, the project will now channel 50% of the revenue it collects over the next year to token buybacks. These tokens will be burned immediately via an irreversible locked smart contract.

Previously, all the fees were used for buybacks, but Pump.fun says that it now intends to use the other 50% to “aggressively hire to build elite product teams, take bigger bets, and push marketing campaigns across our product suite to build an incredibly successful ecosystem.” It stated:

After one year, the buybacks will stop and the project will retain 100% of the fees. However, the team says this is the perfect timeline, as anything shorter would indicate uncertainty about the future, while anything longer would limit the ecosystem’s agility.

Co-founder Alon Cohen lauded the move, describing it as “a turning point for PUMP and Pump.fun.”

“I am extremely confident that 50% of the business we’re building toward will dwarf 100% of the business we have today,” he added.

Pump.fun dominates the Solana launchpad sector, accounting for over 95% of the daily fees generated, with LetsBonk and Bags accounting for $26,000 of the nearly $1 million generated on Tuesday this week. The platform has launched memecoins like Goatseus Maximus (GOAT), Peanut the Squirrel (PNUT) and Fartcoin, which all went on to surpass $1 billion in market cap.

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