PUMP 24-hour increase of 7.24%. Can creator fee reforms drive sustainable growth?

Pump.fun’s native token PUMP continues its upward momentum as of January 12. At the time of writing, PUMP is priced at $0.00247405, up 7.24% in the past 24 hours, with a market capitalization of $876 million, an increase of $59.1 million compared to the previous day. This rally is not an isolated event but a positive signal stemming from the platform’s creator fee mechanism reform, reflecting market recognition of Pump.fun’s ecosystem development direction.

Price Performance and Market Sentiment

From the data perspective, PUMP’s performance remains relatively stable:

In terms of market ranking, PUMP is currently ranked 71st among cryptocurrencies. Although there has been a correction over the past month, the recent upward trend is clear, especially with the 9.92% increase over the past week demonstrating a recovery momentum.

Reform-Driven: Rebuilding the Creator Fee Mechanism

The rally behind PUMP is primarily driven by the reform of the creator fee mechanism on Pump.fun.

Issue Exposure

Alon Cohen, co-founder of Pump.fun, publicly acknowledged on January 10 that the Dynamic Fees V1 mechanism introduced last year had structural flaws. While this mechanism significantly incentivized new creators to join in the short term, doubling platform trading volume, it could “potentially distort the incentive structure” in the long run. Specific issues include:

• Over-incentivizing low-risk token issuance, leading to an increase in token supply with uneven quality
• Insufficient trading activity incentives, causing liquidity imbalance
• Lack of practical application scenarios for creator fees, making them hard to use for community building, celebrity collaborations, and other value-added activities

Reform Direction

As a first-phase adjustment, Pump.fun has launched a creator fee sharing feature with core capabilities including:

• Creators can allocate fees to up to 10 wallets
• Support for transferring token ownership
• Support for revoking update permissions
• Fees can be claimed at any time, with no fees charged by the Pump.fun team

The logic behind this mechanism is to give creators more flexible fee allocation rights, encouraging them to use fees for more valuable purposes rather than passive income. Additionally, the platform plans to adopt a market-based approach to further reform, allowing traders to decide whether a certain narrative deserves creator fees, which will help optimize the incentive structure.

Ecosystem Expansion: New Opportunities in the RWA Sector

Beyond creator fee reform, Pump.fun’s ecosystem is expanding into new areas.

According to the latest news, WorldAssets has completed a brand upgrade, and its dedicated RWA (Real-World Asset Tokenization) trading platform RWAX DEX will officially launch on January 19. The significance of this platform includes:

• Integrating the entire process of RWA asset application, information disclosure framework, and trading matching
• Focusing on 3-5 flagship assets to establish industry benchmarks
• Launching an ecosystem incentive mechanism to lower participation barriers
• Positioning itself as “the Four Meme of the RWA sector,” attracting new users through clearer sector identification

This indicates that Pump.fun’s ecosystem is no longer limited to Meme coins but is expanding into broader asset classes. The introduction of the RWA sector could bring new user bases and trading activity to the platform.

Market Sentiment and Risk Warnings

Bullish Sentiment Rising

Market participants are increasingly optimistic about PUMP. On-chain data shows continuous large-cap capital deploying long positions, with a trader opening a 10x leveraged PUMP long position, totaling 20 billion tokens, with a current position value of $4.77 million. This reflects a considerable bullish consensus in the market.

Meanwhile, on-chain activity on the platform remains high, with recent 7-day gains of about 30%, and increases in trading volume and futures contract participation, indicating a recovering market heat.

Leverage Risks Cannot Be Ignored

It is important to note that derivatives market leverage levels have reached significant scales. High-leverage positions, if faced with liquidation pressure, can trigger chain reactions, leading to increased market volatility. Investors should remain cautious of this risk, especially during periods of heightened market sentiment.

Summary

The rise of PUMP is not purely driven by sentiment but is rooted in tangible platform reforms and ecosystem expansion. The optimization of the creator fee mechanism aims to address incentive misalignments, while the introduction of the RWA sector opens new growth avenues. These initiatives demonstrate that Pump.fun is evolving from a simple Meme coin issuance platform into a more mature multi-asset ecosystem.

However, the current high-leverage participation also signals potential risks. The long-term value of PUMP tokens will ultimately depend on the sustainable development of the platform ecosystem. Moving forward, key points to observe include whether the creator fee reform can truly correct incentive distortions, whether the RWA sector can attract enough quality assets and users, and whether the platform can maintain vitality amid fierce competition within the Solana ecosystem.