Pump.fun co-founder Alon acknowledged that the platform’s creator fee mechanism has failed to deliver sustainable results, prompting a major system overhaul that will let traders decide which tokens deserve revenue-sharing arrangements. The admission comes as the Solana-based memecoin launcher faces mounting legal pressure and market-share erosion while attempting to balance creator incentives with trader participation. Although there has been some increased trading activity in recent days, it is nowhere near what it was before. The platform introduced its first changes through a fee-sharing feature that allows creators to distribute revenues among up to 10 wallets, transfer coin ownership, and revoke update authority. The update aims to address transparency issues that previously forced token holders to trust deployers to manually redirect fees to intended recipients. Creator fees need change. When Dynamic Fees V1 was introduced a few months ago, the goal was to help create more success cases in our ecosystem by giving top project founders and teams a strong incentive to launch their token on pump fun and drive it to success. Only a week… https://t.co/yiu9DjsCqR pic.twitter.com/TZHTPAKnfw — alon (@a1lon9) January 9, 2026 Dynamic Fees Drew Creators But Discouraged Trading Alon explained that Dynamic Fees V1 , launched months earlier, appeared initially successful, attracting creators who had never used crypto applications. “ Only a week later, the potential of the mechanism showed: more and more creators—many of which have never touched a crypto app before—began organically launching coins and streaming on the platform, ” he wrote. The streaming meta that followed doubled platform activity, with bonding curve volumes surging 2x within weeks of the fee structure’s implementation. However, the model created an imbalanced ecosystem by incentivizing low-risk coin creation over high-risk trading activity. “ Traders are the lifeblood of the platform, ” Alon wrote, noting that successful tokens require environments where market participants provide liquidity, generate volume, and take risk. He added that “ creator fees may have skewed the incentive for users to engage in low-risk activity (coin creation) instead of high-risk activity (trading), which is dangerous. “ Alon acknowledged that creator fees “ are a great tool to incentivize high-quality Project Tokens ” but admitted the platform “ fails at providing a good user experience ” for narratives that could use fees to raise project ceilings. The new system will implement “ a market-based approach, and let traders decide whether a narrative truly deserves Creator Fees, and how those should be used. ” He concluded on an optimistic note, stating that he is “ extremely excited for what 2026 holds .” Community Backlash Against Creator Fee Structure The announcement drew sharp criticism from industry observers who questioned whether the changes addressed fundamental problems. Unihax0r, a blockchain developer, dismissed the update as gaslighting, writing: “ All this message to announce: nothing. The trenches need their Hyperliquid moment. We need a launchpad as a public good, where 99% of the value is redistributed to users. “ He criticized Pump.fun for renaming taxes as creator fees, arguing that “ people who deploys are not ‘creators’. They don’t create anything valuable, if anything it should be called Extractor fees. “ Unihax0r claimed that deployers use industrialized tools that launch thousands of tokens “ in 2 clicks ” while collecting substantial revenue with minimal effort, questioning why the platform “ gives them the most upside” when “they NEED 10k deploys a day. “ All this message to announce: nothing The trenches need their Hyperliquid moment. We need a launchpad as a public good, where 99% of the value is redistributed to users We bullied to hell all developers on previous chain for having 5/5 taxes on memes coins and we got absolutely… https://t.co/ytHd5nJMOq — Unihax0r (@0xUnihax0r) January 10, 2026 A user with the X name of “Patience” proposed a simpler solution: “ creator fees to 0% until a coin hits 1m+ mc, charge like 3 to 5 SOL to deploy a coin = problem solved. “ Meanwhile, “ Easy ” from K9 Strategy compared the changes unfavorably to the Bags app, arguing that the fee reassignment feature would incentivize deployers to assign fees to unwilling recipients, creating pressure campaigns in which “ a bunch of bag holders bother the ever living hell out of that person ” to acknowledge tokens they never intended to launch. Growing Legal Troubles and Treasury Controversy Amid all these uncertainties brewing around the platform, a U.S. federal judge in December allowed plaintiffs to add nearly 5,000 internal chat messages to a class-action lawsuit accusing Pump.Fun, Jito Labs, and Solana Foundation entities are operating a coordinated enterprise that gave insiders priority access to newly launched tokens. Judge Colleen McMahon granted permission to amend the complaint with evidence from a whistleblower who resurfaced in September. Over 5,000 internal https://t.co/BB5leCKHRh chats surface, allegedly showing developers and bots coordinating trades and block timing. Lawsuit heats up! #MEV #PumpFun https://t.co/sXWtN893la — Cryptonews.com (@cryptonews) December 18, 2025 The lawsuit alleges that the defendants marketed launches as fair while secretly enabling transaction-order manipulation through maximal extractable value practices. Court filings estimate the platform generated over $722 million in revenue while inflicting between $4 billion and $5.5 billion in losses on retail traders. Separately, co-founder Sapijiju pushed back against allegations of a $436 million USDC cash-out, calling the claims “ complete misinformation ” and describing the transfers as routine treasury management. The post Pump.fun Co-Founder Says Fee Model Failed, Announces System Revamp appeared first on Cryptonews .
