Just picture Sarah, our single working mom with two jobs, trying to figure things out on Crypto Twitter on her lunch hour. She sees "$DOGECOIN2.0" trending, promising "moonshot gains." Driven by the hope of a better life for her kids, she throws in $100 – money she can't really afford to lose. Such is the unfortunate fate for most who jump into the memecoin mania, a universe ruled by Pump.fun.

pump.fun’s new 50% rev share to token creators are easily the most alluring on their face. Content creators receive 0.05% in SOL for each trade. Then it’s just $10 million in volume, and bam, $5,000 drops into their bottom line. The narrative is clear: incentivize creators, discourage rug pulls, and build a more sustainable memecoin ecosystem. Sounds great! Particularly considering Pump.fun’s huge footprint – $22.3 billion in volume is hard to argue with. This is Congress’s first direct attack on rug pulls. These scams have sullied the crypto space for too long.

Is it Really That Simple?

Let's pause. Is this the real savior we’ve been waiting for, or just a band-aid on a rotting, festering core? The surprising link here is between the gold rush and the memecoin frenzy. Remember, selling the miners shovels during the gold rush was much more profitable and less risky than actually mining gold. Are we just making more shovel sellers with Pump.fun?

The real issue isn’t even necessarily rug pulls, although that is part of it. This new model replaces some of that gasoline with dynamite. Instead of deterring the development of billions of junk memecoins, this could potentially incentivize more people to create them. The market will just go out and create even more noise and risk.

Think about it. Before this change creators only benefited when they sold their tokens. Today, they produce predictable recurring revenue by driving up trading volume. This is all income that the token creators receive irrespective of the token’s utility or promise over the long-term. This change in incentives will likely result in an increase in low-effort, pump-and-dump type projects that are only created to maximize trading fees.

Who Truly Benefits Here?

I know what you’re thinking—sure, the lure of get-rich-quick schemes are really alluring. It takes advantage of our intrinsic motivations and our fear of missing out (FOMO). We are most willing to take a risk when we think we have nothing to lose. Who truly benefits from this system?

Does this model encourage gambling addiction? Definitely. Does it not disproportionately enrich insiders who opportunistically accumulate and dump coins shortly after sale? Does it overshadow better, more substantive blockchain use cases? Almost definitely.

It’s the equivalent of providing a free casino buffet to bring in new gamblers. Of course, it does make the experience a little more fun, but that doesn’t in any way mitigate the fact that it’s actually feeding the addiction.

I'm not saying Pump.fun's intentions are malicious. But as we know, the road to hell is paved with good intentions. As with all federal actions, the potential for unintended consequences here is enormous.

The Smart Contract Whispers

From a policy angle, what would this revenue sharing look like from a technical perspective? Could there be any loopholes in the deployed smart contract that an attacker could take advantage of? What are the catch fees or restrictions that users need to find out about? On-chain transactions are incredibly transparent, providing a detailed history of an asset’s interactions. Understanding the intricacies of these transactions takes the kind of technical know-how that most Americans, including Sarah, do not have.

It’s important to be clear that the smart contracts are the law! The administration’s new model should undergo public, third-party audits.

We're talking about people's hard-earned money here. This isn't a game. It’s more than just a picture book, though it’s a real-world financial system and it should be handled as such in the most careful, responsible manner possible.

Ultimately, this isn't about demonizing Pump.fun. And as always, it’s about fostering critical thinking and responsible innovation. We need to ask ourselves: Are we building a future where everyone has access to financial opportunities, or are we simply creating new ways to exploit the vulnerable?

So the next time you see a memecoin taking Twitter by storm, don’t get too discouraged. Do your own research. Avoid FOMO. And keep in mind, if something sounds too good to be true, it probably is.