PumpFun Co-Founder Says Creator Fees Need Urgent Rethink As Platform Prepares Major Overhaul

PumpFun co-founder Alon says the entire fee structure for token creators must evolve, warning that the current model risks incentivizing short-term coin launches at the expense of long-term, value-driven projects.

In a detailed breakdown shared on X, Alon explains that the industry has reached a point where fees earned by creators can surpass the value their projects generate, distorting behavior, attracting inexperienced deployers, and ultimately weakening the ecosystem.

His comments arrive as PumpFun rolls out its latest upgrade, “Creator Fee Sharing,” the first in a series of major changes planned for 2026. According to Alon, the new model aims to realign incentives and restore the dynamic balance between creators and traders, both of whom are essential to the platform’s growth.

Fee Model Faces Structural Problems

Alon explains that incentives shape behavior, and the current system often pushes creators toward short-term token deployments rather than sustainable, value-building projects. Instead of long-horizon development, developers began prioritizing rapid launches because the creator-fee model made it more profitable to deploy tokens than to actually build them.

He argues that a critical misalignment emerged:

• Creators were rewarded more for minting coins than for improving them

• Traders, the platform’s lifeblood, were not receiving enough incentive to participate

• Memecoin deployers, rather than project teams, benefitted most from the fee system

The platform’s analysis shows that the majority of tokens launched during the Dynamic Fees V1 period were not intended to mature into long-term projects. Many deployers were first-time crypto users attracted to low-risk fees rather than market participation.

Dynamic Fees V1 Sparked Frenzy But Exposed Weaknesses

When PumpFun introduced Dynamic Fees V1 a few months earlier, the intention was clear: give high-quality project teams a strong reason to launch on the platform and push their tokens to success. Within just one week, the effects were visible. Thousands of new creators, many of whom had never used a decentralized application before, began launching tokens and streaming activity surged.

The “streaming meta” quickly took over the platform, generating some of the best on-chain conditions of 2025. Bonding curve volume doubled, as shown in internal data and highlighted by growth activity across the platform.

But beneath the excitement, deeper issues emerged. While the mechanism succeeded for structured project tokens, it largely failed for the average memecoin deployer. Creator fees did not meaningfully improve token quality, and they encouraged a wave of low-effort launches that did not contribute to the health of the broader ecosystem.

Memecoin Creation Thrived While Trading Declined

PumpFun’s data indicates that creator fees tilted incentives toward low-risk creation rather than high-risk trading. This imbalance is dangerous, Alon says, because traders generate liquidity, order flow, volume, and price discovery, all of which are essential for tokens to thrive.

In Alon’s words, a healthy ecosystem requires:

• Active traders providing liquidity

• Volume generation

• Market participation

• Risk-taking

• Sustainable token development

Instead, the fee system nudged users into endlessly deploying tokens instead of supporting markets or building depth.

This flaw created an uneven playing field. Project tokens benefitted from the fee system, but memecoins, designed to thrive on market volatility, did not need creator fees. The result: incentives that pulled the ecosystem in the wrong direction.

Creator Fees Lacked Utility, Trust and Transparency

Another major issue was utility. Creator fees could have been powerful tools for token-specific narratives, e.g., sending fees to a known figure associated with the project, onboarding influencers, or building community infrastructure.

But in reality, the user experience (UX) was too complicated. Alon outlines several problems:

• It was difficult for creators to direct fees to a specific person or wallet

• Holders had to trust someone to manually distribute fees

• The system lacked transparency

• Narratives were wasted because fees couldn’t be deployed effectively

These bottlenecks limited the creative potential of token ecosystems, and forced many users to rely on manual processes, CTO (creator takeover) attempts, or trust-based agreements that risked mismanagement.

PumpFun Introduces Creator Fee Sharing

To address these problems, PumpFun has announced “Creator Fee Sharing,” a major upgrade enabling creators to distribute fees seamlessly, transparently, and without trust-based risks.

The new features include:

• Share fees with up to 10 wallets

Creators can allocate percentages to contributors, marketers, influencers, or team members without manual distribution.

• Transfer coin ownership

A new admin can take over the project, enabling long-term development even if the original creator steps back.

• Revoke update authority

Creators can lock the token’s configuration to prevent changes, benefiting stability and investor confidence.

• Entirely transparent payout process

Whenever one fee recipient claims fees, all others trigger their claims automatically.

Unclaimed fees remain available permanently and cannot be seized or reassigned, ensuring safety and trust.

CTO System Gains New Power

The CTO (creator takeover) structure also expands. Once a CTO request is accepted, the new admin gains full control, even if the previous owner revoked update authority. This ensures that token development can continue without being blocked by inactive or malicious original creators.

CTO admins can:

• Adjust fee distribution

• Add or remove team members

• Transfer ownership

• Redirect incentives

• Overhaul token parameters

The upgrade aims to empower traders and communities to salvage strong narratives even if creators abandon or mismanage the project.

More Changes Coming In 2026

Alon emphasizes that this update is only the beginning. PumpFun will continue taking a market-based approach, letting traders decide:

• Whether a token deserves creator fees

• How those fees should be allocated

• Which narratives gain momentum

• Which teams earn community trust

He confirms that multiple new features are already in development, with more announcements scheduled for early 2026. Alon closes by expressing excitement for the new year, suggesting that the platform is preparing a major evolution that will redefine how creator incentives operate.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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