Pump.fun revenue- Chia plan faces criticism over fees and Rug Pull risks

Pump.fun expects its revenue sharing program to revolutionize how creators earn money, limit "pump-and-dump" behavior, and promote more sustainable projects.

However, after about a month since its launch, is this a breakthrough or just a strategy to attract more users?

Challenges and Controversies

Despite being promoted as a breakthrough initiative, Pump.fun's revenue sharing program is not without criticism. A recent report from SolanaFloor highlights several controversies surrounding the program.

First, some argue that the fee structure is ineffective. Posts on X suggest that the 0.05% fee is essentially a new "transaction tax" imposed on users. Pump.fun does not sacrifice its own profits.

Specifically, PumpSwap's previous fee model included 0.2% for LPs and 0.05% for the platform. After the update, Pump.fun introduced an additional 0.05% fee to compensate creators, which increased the total transaction costs. This raised concerns that higher fees could make PumpSwap less attractive compared to other exchanges like Raydium.

Second, some argue that the new fee structure might unintentionally encourage "rug pulls". These criticisms highlight concerns that this revenue model could undermine community-driven initiatives aimed at reviving tokens abandoned by creators.

"I think this is a bad move. 99% of coins are legal CTO coins. People don't want the developer and now we're giving money to the developer who has already rugged, which is really bad in my opinion, but we'll see how it goes," a X user commented.

Third, the revenue sharing program seems ineffective. Data from SolanaFloor shows that only 1.8% of creators earn between 5,000 USD and 10,000 USD, while 48% earn between 100 USD and 1,000 USD. This suggests the program may not provide significant benefits to most creators, especially when 98% of tokens on Pump.fun are suspected to be "pump-and-dump" projects.

In summary, while providing creators with passive income opportunities, the program still faces significant limitations, from increased transaction fees to uneven profit distribution.

Moreover, higher fees could affect PumpSwap's competitiveness, especially as competitors like Raydium develop alternative platforms such as LaunchLab.

In the volatile meme coin market, with Pump.fun's revenue sharply declining, the program needs to adjust to balance the benefits for creators, traders, and the platform itself. Another X user also argued that the program should have "been around for a long time and will not be enough to maintain market share" for Pump.fun in a competitive field.