Pump.fun Will Distribute Protocol Revenue to PUMP Token Holders

Pump.fun, reportedly seeking to raise $1 billion through an initial coin offering, is considering sharing protocol revenue with prospective token holders, according to two sources familiar with the matter. It remains unclear how much of the Solana based memecoin platform’s revenue—if any—will be directed to the forthcoming PUMP token through the “buyback-powered utility structure.”

It is also uncertain whether this would include revenues generated from PumpSwap, the decentralized exchange launched earlier this year. Pump.fun did not respond to multiple requests for comment. According to The Block’s data, Pump.fun’s daily revenue peaked at more than $7 million on Jan. 23, though it has since declined to about $1 million per day. The platform has generated roughly $677 million in cumulative revenue since its launch in early 2024, making it one of the most lucrative startups in the crypto space.

“Some of this stuff is subject to change, but the idea is to have a buyback tied to a portion of Pump revenue generated,” someone close to the founding team, who asked to remain anonymous, told The Block. “The plan is for tokens to unlock at the TGE for people who participate in the sale, private or public.”

Pump.fun first teased a token launch last October, when a then-anonymous co-founder said during an X Spaces event that the company was “planning to launch a token in the future” to “reward our earliest users.” Earlier this week, Blockworks reported the startup is preparing for an ICO at a $4 billion valuation. The company has neither confirmed nor denied that report, which has become a much-discussed issue across the crypto industry.

The PUMP token, which will be sold to both public and private investors, is expected to be fully unlocked at the token generation event, according to two sources familiar with the plan. There may be additional token issuances, though the total supply is expected to be capped at 1 trillion tokens.

The team is currently pitching private investors at $0.004 per token, with a public sale planned within two weeks, one source said. Part of the sale will reportedly take place on exchanges including Binance, and an airdrop is expected. Approximately 25% of the token supply will go to the public sale, with another 10% reserved for the airdrop, one source estimated.

“All the money we made so far is being reinvested back into the platform,” the founder said in October. “We want to create something as big as Binance — bigger than that … our goal is to bring this to the masses.”

Pump.fun is often credited with helping to revive the Solana ecosystem, which was battered by the collapse of major SOL backer Sam Bankman-Fried. The potential ICO appears to have boosted recent user activity on Pump, which was marked by a significant decline since the start of the year. According to The Block’s data, the percentage of “graduated” tokens — those that see enough market activity to move onto an affiliated decentralized exchange — has spiked to over 4% from a recent low below 1%.

Terron Gold