Pump.fun Introduces “Cashback Coins” – A New Rewards Model That Shifts Incentives from Creators to Traders
Solana‑based memecoin launchpad Pump.fun announced a major tweak to its fee‑distribution mechanism on Tuesday, rolling out a “Cashback Coins” feature that lets token traders earn a share of platform fees instead of the token’s original creator.
What’s changing?
Pump.fun’s original model awarded token creators a fixed 0.3 % of all fees generated by the tokens they launched. The platform’s leadership now argues that this approach over‑rewards projects that have little or no development team behind them, especially in a market where many memecoins succeed purely through community hype.
Effective immediately, creators must decide—before a token’s launch—whether they will retain the traditional creator‑fee entitlement or switch to a trader‑cashback scheme. Once the selection is made it cannot be altered. Under the new scheme, every trade executed through Pump.fun’s integrated Terminal generates “Cashback Coins,” which are distributed exclusively to traders who interact with the token.
“Traders can now align themselves with the projects they believe in, allowing market dynamics to dictate who receives rewards,” the platform explained in its announcement.
How the cashback works
- Generation: Cashback Coins are minted on each trade made via the Pump.fun Terminal.
- Access: The coins are only claimable through the Terminal, incentivising higher usage of the built‑in trading interface.
- Distribution: The portion of fees that would have gone to the creator under the old model is redirected to traders proportionally, based on trade volume.
Why the shift now?
The move comes amid a broader slowdown in Pump.fun’s fee revenue. According to on‑chain data aggregators, the platform recorded $31.8 million in fees for January 2026—a 75 % drop from its all‑time high of $148.1 million in January 2025. February’s revenue to date stands at $15.6 million, indicating that the platform is still lagging behind its peak performance.
Analysts have also noted that the memecoin sector appears to be approaching a bottom, with on‑chain analytics firm Santiment describing recent sentiment as a “classic capitulation signal.” In such an environment, rewarding active traders rather than token issuers could help sustain liquidity and user engagement.
Community reaction
Early feedback has been mixed. Many community members welcomed the change, seeing it as a way to level the playing field for retail traders who have historically borne the brunt of losses. Others, however, voiced concerns that the new model might dampen developer incentives. An X user highlighted the risk that “developers may have less motivation to promote their coins for an extended period, as the most lucrative window is now confined to the launch phase.”
Industry context
Pump.fun’s adjustment mirrors a broader re‑evaluation of creator‑centric reward programs across the crypto space. Less than two weeks earlier, Coinbase’s Base layer‑2 shut down its own Creator Rewards initiative, citing a strategic pivot toward tradable assets. Base had paid out roughly $450,000 to 17,000 creators over seven months, averaging about $26 per creator—figures that underscored the limited impact of such schemes.
Key takeaways
- New incentive structure: Traders, not token creators, will receive fee‑based rewards via Cashback Coins when the creator opts into the new model.
- Irreversible choice: Creators must lock in their reward preference before launch, with no ability to switch later.
- Revenue backdrop: The rollout follows a sharp decline in Pump.fun’s fee income, down more than three‑quarters from its 2025 peak.
- Market timing: The shift arrives as memecoin sentiment reaches a potential trough, suggesting a focus on trader engagement may help revive activity.
- Broader trend: Other platforms are either revising or abandoning creator‑reward programs, indicating a sector‑wide reassessment of how value is distributed.
Pump.fun’s Cashback Coins could reshape the dynamics of Solana’s memecoin ecosystem, putting a premium on active trading and potentially fostering a more sustainable fee environment. Whether the model will attract new liquidity and retain developers remains to be seen, but it marks a notable pivot in how decentralized launchpads think about reward allocation.
Source: https://cointelegraph.com/news/pumpfun-launches-cashback-coins-rewards?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
