Pump.fun Launches Cashback Coins to Reward Traders With Fees
Pump.fun has launched Cashback Coins, a new option for meme coin creators that redirects creator fees to traders and holders to address complaints about fee payouts going to deployers who add little long term value.
Key Takeaways
- Cashback Coins let creators choose to send all creator fees to traders and holders instead of keeping them.
- The choice between Trader Cashback and Creator Fees must be made before launch and is locked forever once the token goes live.
- The update applies only to new tokens, and it changes incentives toward higher trading activity.
- Pump.fun is pushing product changes as it faces criticism tied to low effort launches and a rising failure rate across new crypto projects.
What Happened?
On Feb. 17, Pump.fun announced Cashback Coins, a launch setting that forces creators to pick either traditional Creator Fees or a model that redirects those fees entirely to traders and holders. Pump.fun says the goal is to let the market decide which tokens deserve creator payouts while rewarding participants in tokens that succeed without an active team or leader.
Why Pump.fun Changed the Fee Playbook?
Pump.fun has become one of the most visible drivers of meme coin tokenization, but it has also drawn sharp criticism for enabling a wave of low effort launches. The platform has been repeatedly labeled a profit extraction machine by users who argue that some deployers collect fees even when a token has no roadmap, no team, and no meaningful follow through.
In its announcement, Pump.fun defended the idea of creator fees in general, arguing they can support teams, creators, and founders as they grow. At the same time, it acknowledged the uncomfortable reality that many tokens can take off without any leadership at all, which can disproportionately reward deployers who do not deserve the fees.
Cashback Coins are Pump.fun’s attempt to turn that argument into a simple choice at launch. If a creator believes their project merits ongoing rewards, they can stick with Creator Fees. If the token is meant to be community driven or pure trading momentum, the creator can opt into Trader Cashback and give the fee stream to market participants instead.
How Cashback Coins Work?
The mechanic is straightforward. Before launching a token, the deployer must choose between:
- Trader Cashback, which redirects all creator fees to traders and holders.
- Creator Fees, which keeps the fee stream with the creator side of the token.
Once the token launches, that decision cannot be changed. Pump.fun says the lock is permanent in both directions, meaning Cashback Coins stay cashback forever and Creator Fee coins stay creator fee forever.
There is also a major trade off. Cashback Coins do not support the Community Takeover model, often shortened to CTO. In practice, that means Cashback Coins are designed to reward traders and holders rather than provide a built in fee structure that supports CTO organizers or admins.
Pump.fun also made clear that the update applies only to newly launched tokens, not to coins that are already deployed.
The Bigger Context: Too Many Tokens, Too Many Failures
This update lands at a time when the broader crypto ecosystem is struggling with survivability. A January report from CoinGecko found that 11.6 million crypto projects failed in 2025, the highest annual figure on record. Those failures represented 86.3 percent of all project closures between 2021 and 2025.
The report pointed to market volatility as a likely factor, but it also highlighted how meme coins were hit especially hard as low effort tokens dominated new listings on launch platforms like Pump.fun.
Cashback Coins look like a direct response to that reputational drag. By shifting fee rewards toward traders when a token has no real team, Pump.fun is trying to reduce the sense that deployers are being paid simply for clicking a button.
What It Could Mean for PUMP Price Action?
The update also arrived as Pump.fun’s native token PUMP showed tightening price action. At press time, PUMP traded around $0.002162, down 3.2 percent over 24 hours. Over the past week, it ranged between $0.001843 and $0.002355, with price sitting near the upper end of that band. PUMP was up about 13 percent on the week, but still down roughly 15 percent over the past month.
Image Credit – CoinGecko.com
Trading activity picked up alongside the news. Spot volume reached $110 million in 24 hours, up 56 percent day over day. Derivatives data also showed higher activity, with futures volume rising 38 percent to $234 million, while open interest increased 1.08 percent to $174 million.
The cashback structure could further encourage short bursts of trading, since more turnover can generate more fees to redistribute. That can support activity, but it can also increase volatility if traders rotate quickly in and out to chase rewards.
CoinLaw’s Takeaway
I see Cashback Coins as Pump.fun admitting something the market has been shouting for months: not every deployer deserves a permanent fee stream. In my experience, the fastest way to poison a community is to let someone extract value without adding any. This update does not magically fix meme coin quality, but it does set a clearer standard. If you want fees, prove you are building. If you are not building, let the traders take the rewards. I found that kind of transparency tends to improve trust, even in markets that thrive on chaos.
The post Pump.fun Launches Cashback Coins to Reward Traders With Fees appeared first on CoinLaw.
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