Pump.fun aims to incentivize trading, rather than the new creation and abandonment of new projects.
Pump.fun announced a new way of redistributing creator fees. A new version of dynamic fee sharing arrived, announced the platform’s co-founder, Alon Cohen.
Pump.fun will update the distribution of its creator fees, announced the platform’s co-founder, Alon Cohen. The shift arrives just as Pump.fun recovered some of its activity with new launches and decentralized trading.
Pump.fun announced creator fees may be shared with up to 10 wallets, to incentivize engaged teams.
The exact evolution of fees and incentives will become more clear in the future. More changes will be coming soon, to incentivize the creation of quality assets. The project’s founder announced the upcoming changes after months of almost no posting, where token creation and trading in the trenches slowed down. As Cryptopolitan reported earlier, the introduction of creator fees led to significant gains for the first wave of streamers.
The upgrade arrives as Pump.fun activity is growing again. The platform aims to incentivize trading, which is becoming its main source of fees, rather than constant new token minting, to generate and support more sustainable projects.
The creator rewards were one of the key incentives to keep up the pace of new token launches. However, Cohen noted the incentive produced the low-risk behavior of token creation, while increasing the risk for traders.
‘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, because traders are the lifeblood of the platform,’ stated Cohen in an X post.
He added that the incentives should have better utility for the platform. The creator fees were used to draw in high-profile persons from the crypto space, including the White Whale and others, he added. However, users often end up having to take over coins in order to keep them alive.
According to Cohen, creator fees are a good idea for project tokens with a commitment to long-term existence. For other types of tokens, creator fees are not a good idea, he said. Pump.fun will focus more on traders for a more user-friendly and fair experience when the changes to creator fees are finally announced.
The Pump.fun creator fees were seen as a way to exploit traders. Fees declined once a project achieved a higher valuation, leading some coin creators to abandon their memes and create new ones.
For now, the Pump.fun mobile app will offer a more fair approach to distributing fees to ten addresses. Following a community takeover, the new coin owners can also stop or redistribute fees in another way.
After the update, eligible fee recipients will have to claim the reward to receive it. Previously, teams relied on an airdrop and had potential problems with unverified wallets. Additionally, Dynamic Fees may increase the potential earnings of creators.
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