PumpSwap, the DEX tied to memecoin launchpad Pump.Fun, now shares trading revenue with token creators, but not everyone’s celebrating.
Background
- PumpSwap, the decentralized exchange launched by Solana-based memecoin platform Pump.Fun, has introduced a new revenue-sharing model aimed at incentivizing token creators.
- The initiative allocates 50% of PumpSwap’s protocol revenue, 0.05% of every transaction, to developers of eligible tokens. Based on April 2025’s $11.2 billion trading volume, this could have meant a $5.6 million payout to token creators.
- PumpSwap operates with a 0.25% base fee per swap: 0.2% for liquidity providers and 0.05% for the protocol. Under the updated model, that protocol cut is now redirected to a vault account linked to the token creator, effectively raising the total trading fee to 0.3%.
Why Should You Pay Attention?
- With this new model, creators now have a passive revenue stream tied to the on-chain performance of their tokens, potentially transforming the incentive landscape of memecoin development.
- However, concerns about rewarding bad actors, such as developers who rug-pull or abandon projects, have prompted debate on the long-term impact of the change on token integrity and community trust.
Who Said What?
- The project confirmed the revenue-sharing rollout in an official post, highlighting the goal of empowering token creators.
- Meanwhile, not everyone agrees. Pseudonymous trader 0xRiver on X wrote:
“ngl I think this is a horrible move 99 % of coins are legit cto coins people dont want the dev and now we are giving the dev money that he rugged this is super bad imo but we see how it goes”
- Other critics echoed the sentiment, suggesting the system discourages community-driven initiatives and incentivizes short-term behavior among memecoin creators.
Zooming Out
- Launched in January 2024 by Noah Tweedale, Alon Cohen, and Dylan Kerler, Pump.Fun has grown rapidly by simplifying token creation on Solana. Users can mint tokens instantly, assign names and images, and trade via a bonding curve mechanism.
- PumpSwap, introduced in March, streamlined the migration process from Pump.Fun to DEXs by eliminating the 6 SOL migration fee and offering built-in liquidity.
- While the revenue-sharing feature could become a catalyst for memecoin creator engagement, it also risks amplifying exploitative behavior, posing a dilemma for decentralized innovation and accountability in DeFi ecosystems.
