According to Cointelegraph, Pump.fun co-founder Alon Cohen stated that the platform will comprehensively reform its creator fee system, as the current model is believed to potentially distort incentive structures. Cohen posted on the X platform, acknowledging that the "Dynamic Fees V1 system," introduced several months ago, successfully boosted activity but failed to generate sustainable market behavior. The mechanism encouraged low-risk token creation at the expense of high-risk trades, which was described as "dangerous," since traders are the core source of the platform's liquidity and trading volume. As the first phase of the reform, Pump.fun will introduce a creator fee-sharing feature, allowing creators and communities to take over administrators' ability to allocate a specific percentage of fees to up to 10 wallets after a token's launch. The team will also be able to transfer token ownership and revoke update permissions.
Pump.fun to Reform Creator Fee System, Citing Distorted Incentives
TechFlowShare
Summary
Pump.fun is overhauling its creator fee system, with co-founder Alon Cohen citing distorted incentives. The new "Dynamic Fees V1" increased activity but failed to encourage a healthy risk appetite. The platform will now allow creators to share fees with up to 10 wallets after launch. Traders, who are crucial for liquidity, are now being prioritized over low-risk token creators. The update also enables ownership transfer and the revocation of update rights. The focus of altcoins to watch may shift as the model continues to evolve.
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