Controversy Surrounds PumpSwap Payout Model for Token Creators
A new revenue-sharing initiative by PumpSwap, the decentralized exchange (DEX) connected to the Solana-based memecoin launchpad Pump.Fun, has ignited significant debate within the cryptocurrency community.
The program is designed to allocate half of PumpSwap’s protocol earnings directly to the individuals who develop tokens traded on its platform.
Details of the Creator Payout Scheme
Under this contentious model, creators of a specific token are slated to receive 0.05%, equivalent to 5 basis points of each qualifying transaction, disbursed in Solana (SOL).
To put this in perspective, based on PumpSwap’s reported trading volume of $11.2 billion in April 2025, such a system could have resulted in a distribution of approximately $5.6 million to token developers.
PumpSwap’s income is chiefly derived from transaction fees.
This suggests the total transaction cost could potentially rise to 0.3% per swap.
Widespread Community Criticism and Concerns
Detractors argue that it perversely incentivizes negative behaviors, such as encouraging developers to abandon projects after initial fundraising (“rug pulls”) or to cease active development post-launch.
Furthermore, critics suggest it undermines genuine community-led efforts, such as community takeovers (CTOs) of neglected projects.
Others have voiced apprehension that this fee structure diminishes the incentive for community members to assume responsibility for projects forsaken by their original founders.
Pseudonymous trader 0xRiver articulated this sentiment, 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: The Pump.Fun Launchpad
Pump.Fun, launched in January 2024 by co-founders Noah Tweedale, Alon Cohen, and Dylan Kerler, operates as a launchpad on the Solana blockchain.
Its core aim is to simplify the creation and trading of tokens, particularly memecoins.
The platform provides a user-friendly interface enabling anyone to mint a token for a minimal cost initially around 0.02 SOL.
Approximately $3, though these fees were occasionally waived to boost platform activity, assign an image, choose a ticker symbol, and commence trading almost instantly.
The platform employs a bonding curve mechanism, where a token’s price escalates with increasing demand, starting from a very low initial value.
Tokens are traded exclusively on Pump.Fun until they achieve a market capitalization generally between $69,000 and $90,000.
These thresholds have seen some variation, at which point they “graduate” and become eligible for listing on a broader DEX.
PumpSwap’s Role in the Ecosystem
To further support its ecosystem, Pump.Fun introduced PumpSwap in March.
This DEX was designed to improve the token migration pathway for memecoin creators on its platform by offering immediate migrations.
Waiving the previous 6 SOL migration charge, and establishing its own liquidity pools, thereby reducing reliance on external DEXs such as Raydium.
Also Read: PumpSwap DEX on Solana Erupts with Unprecedented $3.45 Billion Transaction Volume
