Pump.fun’s recent move – passing 50% of all trading fees back to token creators – seems like a clear win-win. More incentive, less rug-pulling, right? Let’s face it, in the wild west of memecoins it is never that cut and dry. Having tracked whale movements and governance quirk year in crypto for years. This has been the case, but now I perceive a much more interesting and deeper game at play. This isn’t limited to more equitable payments either. It’s not just a potential power shift, it’s a change that could have unintended consequences to the whole Solana ecosystem.

Whales' New Playground: Manipulate to Earn?

Think about it. Whales are the top of the food chain, able to send markets soaring or crashing with one order. As such, they now have a strong financial incentive to develop and promote their own memecoins. In the past, perhaps they were happy to just settle for the spoils of a hot coin. Now, through the power of next-generation technology, they can orchestrate the entire damn symphony.

Will this force innovation and a more interesting hodgepodge of dangerous but exciting memecoins. Maybe. Let's not kid ourselves. This new regulatory hole will inevitably trigger a dangerous race to the bottom. Predators are going to weaponize the minting capacity by flooding the market with minimum effort tokens, manipulating prices to inflate trading volume, and lining their pockets with their 50% cut. It’s the same as handing a pyromaniac a box of matches and hoping they’ll learn how to build the bonfire.

Governance Grab: Creators Gain Control?

Pump.fun claims this is about empowering creators. So, who are these cultural creators in the first place? A one-off from a lone developer with a clever idea, or a whale in disguise? This revenue-sharing model could inadvertently concentrate power in the hands of those who already have it: the ones with the capital to launch multiple tokens and the influence to generate trading volume.

And if so, will this produce more decentralized decision-making at the grassroots level within the Pump.fun governance ecosystem? Don't bet on it. Collectively, we should look for a new wave of these so-called “whale-backed” tokens. In such a case, powerful creators will drive all the decisions, putting much of the smaller fish out of business. And what about the community? Or will they, too, be left out with no say in how these projects are developed and dealt with? Or will they simply be silent witnesses of the process?

The Rug's Still There: Just Better Hidden?

Pump.fun is marketing this as a cure for rug pulls. And while it may deter some obvious fraud, it now incentivizes new, more sophisticated modes of trickery. What's stopping a creator from slowly bleeding a token dry, collecting their 50% cut along the way, instead of pulling the rug all at once?

The second managing the first is the potential for insider trading. Creators have access to real-time trading data. This ghosting advantage is what allows them to optimize their choices. The trouble is, these decisions create a cash cow for them at the public’s expense.

Those numbers, while promising, do not tell the whole story. They don’t tell us how much of that volume is organic versus manipulated. They don’t let us know how many of those projects are actually successful and how many are just pump-and-dump scams in tuxedos.

This isn't about demonizing Pump.fun. It’s not about avoiding all risk, but rather understanding the risk and actively working to minimize it. The solution lies in more effective on-chain data analysis that allows us to instantly track whale activity and flag suspicious trading patterns. What we really want are more robust governance mechanisms to make sure that projects are still accountable to their communities.

  • $22.3 billion in volume (as of May 7, 2025)
  • 2.8% of all protocol volume on Solana
  • 62% of all Solana transactions (in November 2024)

And lastly, we need to be re-educated and equipped with the understanding to approach memecoins with a suspicious mind. Don't blindly follow the hype. Do your own research. And as always, if it sounds too good to be true, it likely is.

As a first step, Pump.fun’s revenue-sharing model would be an inspiring way to pump positive change into the system. We can’t go down this road without recognizing the dangers. In doing so, we’ll all be better equipped to build a more fair and transparent ecosystem together. Otherwise, it will just be another tool for the whales to increase their fortunes, this time on everyone else’s dime. If you want the “free market” to work, it requires a level playing field, not just a larger feeding trough for the largest fish.

This isn't about demonizing Pump.fun. It's about acknowledging the potential risks and working to mitigate them. We need better on-chain data analysis to track whale activity and identify suspicious trading patterns. We need more robust governance mechanisms to ensure that projects are accountable to their communities.

And most importantly, we need to educate ourselves and approach memecoins with a healthy dose of skepticism. Don't blindly follow the hype. Do your own research. And remember, if something sounds too good to be true, it probably is.

Ultimately, Pump.fun's revenue-sharing model could be a positive step forward. But only if we're willing to acknowledge the potential pitfalls and work together to create a more transparent and equitable ecosystem. Otherwise, it's just another way for the whales to get richer, at the expense of everyone else. The "free market" needs a level playing field, not just a bigger feeding trough for the biggest fish.