Summary
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PumpSwap, the DEX associated with the Solana memecoin launchpad Pump.Fun, has implemented a revenue-sharing program, allocating 50% of its protocol revenue (0.05% of each eligible transaction in SOL) to token creators.
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This new fee structure, potentially increasing total swap fees to 0.3%, has drawn significant criticism on social media, with users arguing it incentivizes “rug pulls” and discourages community takeovers by rewarding potentially negligent developers.
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Pump.Fun, launched in January 2024, simplifies memecoin creation on Solana using a bonding curve model, with tokens graduating to a DEX after reaching a certain market cap.
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PumpSwap was launched by Pump.Fun in March to streamline token migration, offering instant, fee-free migrations and its own liquidity pools, aiming to improve upon reliance on third-party DEXs.
PumpSwap, the decentralized exchange (DEX) linked to the Solana-based memecoin launchpad Pump.Fun, has initiated a revenue-sharing program designed to distribute 50% of its protocol revenue to the creators of tokens traded on the platform.
New Initiative Allocates Trading Revenue to Creators
Under this new model, developers of a specific token will receive 0.05% (or 5 basis points) of each qualifying transaction, paid out in Solana (SOL).
Based on PumpSwap’s reported trading volume of $11.2 billion in April 2025, this program could have resulted in approximately $5.6 million being disbursed to token creators during that period.
Fee Structure and Potential Total Cost
PumpSwap’s revenue is primarily generated from swap fees applied to trades executed on its platform.
The standard fee is set at 0.25% per transaction, with 0.2% allocated to liquidity providers and 0.05% retained as protocol revenue.
Updated documentation suggests that an additional fee might be directed to a dedicated “coin creator vault account.”
This could potentially increase the total fees per swap to 0.3%.
Community Backlash and Criticisms
The announcement of PumpSwap’s creator revenue-sharing program has been met with widespread negativity on social media platform X.
Critics argue that this system incentivizes detrimental behavior among token creators, particularly those who might engage in “rug pulls” (abandoning a project after raising funds) or neglect their projects post-launch.
Concerns have also been raised that it discourages community-driven efforts, such as community takeovers (CTOs) of abandoned projects.
Numerous users on X have contended that the 0.05% fee allocated to creators could encourage developers to simply launch tokens and then passively collect revenue from trading fees without any commitment to ongoing project maintenance or development.
Others have expressed worries that this fee structure will make it less appealing for community members to step in and revive projects deserted by their original founders.
Pseudonymous trader 0xRiver voiced strong disapproval, stating, “I think this is a horrible move. 99% of coins are legit CTO coins.
People don’t want the dev, and now we are giving the dev money that he rugged. This is super bad.”
Background on Pump.Fun and PumpSwap
Pump.fun, a launchpad operating on the Solana blockchain, was co-founded by Noah Tweedale, Alon Cohen, and Dylan Kerler and launched in January 2024.
Its primary objective was to simplify the process of token creation and trading, with a particular focus on memecoins.
The platform’s user-friendly interface allows individuals to create a token for a nominal fee (initially around 0.02 SOL, or approximately $3, though creation fees were sometimes waived to stimulate activity), upload an image, select a ticker symbol, and begin trading almost immediately.
Pump.Fun utilizes a bonding curve model, where the price of a token increases with rising demand, starting from a very low initial base.
Tokens trade exclusively on Pump.Fun until they achieve a market capitalization typically ranging between $69,000 and $90,000 (these thresholds have fluctuated).
Upon reaching this milestone, they “graduate” to a decentralized exchange.
In March, Pump.Fun introduced PumpSwap to enhance the token migration process for its memecoin creators.
This was achieved by offering instant migrations, eliminating the previous 6 SOL migration fee, and providing greater liquidity through its own dedicated liquidity pools, rather than depending on third-party DEXs like Raydium.
Also Read: Solana’s PumpSwap DEX Shatters Records with $3.45 Billion Trading Frenzy
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