PumpSwap Launches Controversial Revenue-Sharing Program for Token Creators on Solana

PumpSwap, the decentralized exchange launched by Solana-based memecoin factory Pump.Fun, has introduced a creator revenue-sharing program that promises to distribute 50% of its protocol revenue to token creators. But while the move might sound like a win for decentralization and innovation, many in the community fear it’s a dangerous incentive for bad actors.

According to the official announcement, token creators will now receive 0.05% of every transaction (5 basis points) conducted via PumpSwap. With PumpSwap posting $11.2 billion in trading volume for April 2025, this would equate to roughly $5.6 million in potential creator payouts based on that month’s activity alone.

A Fee Structure Shift: Trading Fees Now Total 0.3%

PumpSwap’s original swap fee stood at 0.25% per transaction, split between liquidity providers (0.2%) and protocol revenue (0.05%). However, updated documentation reveals that an additional cut now goes to a coin creator vault, bringing the total swap fee to 0.3%. This means traders effectively fund token developers each time a transaction occurs, regardless of the token’s legitimacy or ongoing development.

Community Backlash: Incentivizing Abandonment?

While revenue sharing might seem like a creator-friendly initiative, the reaction on X (formerly Twitter) has been overwhelmingly negative. Critics argue that the model inadvertently encourages rug pulls and developer apathy, as it allows project creators to continuously earn revenue from trades even after abandoning a project.

“This is a horrible move,” said pseudonymous trader 0xRiver. “99% of coins are legit CTO [community takeover] coins. People don’t want the dev, and now we’re giving the dev money even after a rug. This is super bad.”

Other users echoed similar concerns, pointing out that the model disincentivizes community efforts to salvage or develop abandoned tokens, a phenomenon that’s become part of Pump.Fun’s memecoin culture.

The Origins of PumpSwap and Pump.Fun

Pump.Fun first went live in January 2024, founded by Noah Tweedale, Alon Cohen, and Dylan Kerler, with the mission of democratizing meme token creation on Solana. The launchpad made it easy for anyone to spin up a coin with just a few clicks, for a small fee of around 0.02 SOL (about $3 at the time). At various points, token creation was even made free to stimulate growth.

Using a bonding curve model, Pump.Fun tokens begin trading at a low cost and increase in price as demand rises. Once a token’s market cap crosses a threshold—typically between $69,000 and $90,000—it “graduates” to a decentralized exchange.

In March, PumpSwap was introduced to streamline this migration process. It eliminated the 6 SOL migration fee, offered faster onboarding, and created in-house liquidity pools instead of depending on third-party platforms like Raydium.

A Double-Edged Sword for the Solana Memecoin Scene?

While PumpSwap’s creator revenue-sharing program might boost activity and attract more token launches, it’s also amplifying the ethical tension surrounding low-barrier token creation. As the memecoin ecosystem on Solana continues to balloon, the pressure is on platforms like Pump.Fun to balance innovation with integrity.