Pump.fun, the Solana-based memecoin launchpad that defined the 2024-2025 token launch frenzy, rolled out a new feature on February 17 called Cashback Coins. As of February 18, 2026, the mechanic forces token creators to make an irreversible choice before launch: keep the standard 0.3% creator fee, or redirect all of it to the traders who buy and sell the token. The timing is not subtle. Pump.fun's revenue cratered 76% year-over-year, dropping from $148.1 million in January 2025 to just $31.8 million in January 2026, according to Cointelegraph.
The Binary Choice That Cannot Be Undone
The core mechanic is simple but consequential. Before a new token goes live on Pump.fun, its creator selects one of two paths:
- Creator Fees: The original model. The deployer collects 0.3% of all trading fees generated by their token.
- Cashback Coins: All creator fees get redirected to traders who engage with the token.
Once selected, the choice is permanent. There is no switching later. Cashback Coins are generated on every trade and can only be claimed through Terminal, Pump.fun's integrated trading platform.
This is a deliberate lock-in mechanism. By tying rewards exclusively to Terminal, Pump.fun ensures that traders who want cashback must stay within its ecosystem rather than routing through third-party Solana DEX aggregators.
A Platform Responding to Its Own Data
The feature did not emerge in a vacuum. Dune Analytics data from 58.7 million wallets that have interacted with Pump.fun paints a grim picture for the average participant:
- 4.76 million wallets (8.1%) profited between $1,000 and $10,000
- 969,780 wallets (1.65%) earned $10,000 to $100,000
- Fewer than 13,700 wallets (0.02%) achieved millionaire status
That means roughly 90% of wallets either broke even or lost money. The criticism has been relentless: deployers were collecting fees on tokens they had no intention of developing, while traders absorbed the losses. Pump.fun acknowledged this directly, stating that "many tokens achieve success without a team or project lead, thereby disproportionately rewarding token deployers who don't deserve the fees."
Cashback Coins is Pump.fun's answer. If a creator has no plans to build, they can still launch a token, but the market will route around them by favoring Cashback Coins over fee-extracting alternatives. Traders "can choose to engage with tokens they feel the most aligned with, ultimately letting the market decide who gets rewarded and where the bar is set," the platform said.
How the Fee Redirection Actually Works
Under the Cashback model, every trade generates rewards proportional to the trading volume. The mechanics favor active participants over passive holders, which means the feature is designed to boost trading velocity rather than encourage long-term holding.
There is one critical restriction: Cashback Coins cannot undergo a CTO (Creator Token Offering). This prevents a scenario where a deployer selects cashback to attract early traders, then uses a CTO to extract value later. It is a closed loop, trader rewards in, no creator offramp out.
The feature only applies to new tokens. Existing Pump.fun tokens that already launched with creator fees enabled cannot retroactively switch. This creates a visible divide on the platform between legacy tokens (creator-fee enabled) and new Cashback Coins, giving traders a clear signal about which tokens are designed to reward them.
PUMP Token Reacts With a Volume Spike
The PUMP token, Pump.fun's native asset, responded with a 56% surge in 24-hour spot volume to $110 million and a 38% increase in futures volume to $234 million as of February 18. The price itself was more subdued, trading at $0.002162 (down 3.2% in 24 hours) but up 13% on the week.
The divergence between volume and price tells a story. Traders are repositioning around the announcement, but the market has not yet decided whether Cashback Coins is a genuine structural improvement or a last-resort retention play. The 7-day range of $0.001843 to $0.002355 suggests the market is compressing before a directional move.
Technical indicators show PUMP trading below a descending trendline with Bollinger Bands tightening. The RSI sits near 45, below the bullish 50 threshold. Resistance sits at $0.0023, with support around $0.0021.
The Solana Ecosystem Ripple Effect
Pump.fun is not operating in isolation. The Solana memecoin ecosystem has been under pressure for months, with the broader meme coin sector shedding 34% of its value over the past 30 days. Pump.fun's revenue decline mirrors a wider cooldown in speculative token launches.
But the Cashback Coins mechanic introduces an interesting precedent for the Solana ecosystem. If fee redirection to users becomes the expected standard on launchpads, it could pressure competing platforms to match. This is the same dynamic playing out in crypto card rewards, where platforms compete by redirecting more of their fee revenue back to cardholders. Pump.fun's move is the DeFi equivalent of a card issuer raising its cashback rate to stop customer churn.
For Solana-native card products like Jupiter, KAST, and Solflare, a healthier Pump.fun ecosystem means more active Solana users and more demand for on-chain spending tools. The connection is indirect but real: memecoin trading drives wallet creation, wallet creation drives card adoption.
The Bull and Bear Case
The bull case: Cashback Coins aligns incentives correctly. Tokens that reward traders will attract more volume. More volume generates more fees. More fees create bigger cashback pools, creating a flywheel. If Pump.fun can reverse its revenue decline by attracting traders back with better economics, the 76% revenue drop becomes a trough rather than a trend.
The bear case: Cashback Coins may amplify short-term speculation at the expense of project quality. If creators have no financial incentive to promote or develop their token post-launch, the average token lifespan could shrink even further. Critics like X user Coos questioned whether reduced creator incentives might "discourage developers from promoting their coins post-launch." The feature could turn Pump.fun into a pure casino where the house redistributes some of the rake, but nobody is building anything.
The truth likely sits somewhere in the middle. Serious projects will still choose creator fees because they need revenue to build. Memecoins with no development roadmap, which represent the vast majority of Pump.fun launches, will default to Cashback Coins because it is the only way to attract trading volume in a saturated market.
FAQ
What are Pump.fun Cashback Coins? Cashback Coins are a new feature that redirects all creator fees (0.3% of trading volume) to traders instead of token deployers. Creators must choose this option before launch, and the decision is permanent.
Can existing Pump.fun tokens switch to Cashback Coins? No. The feature only applies to newly launched tokens. Existing tokens that launched with creator fees cannot retroactively enable cashback.
Where do traders claim their cashback rewards? Cashback rewards are exclusively available through Terminal, Pump.fun's integrated trading platform. They cannot be claimed through third-party interfaces.
Does choosing Cashback Coins affect CTO eligibility? Yes. Tokens that select Cashback Coins cannot undergo a Creator Token Offering (CTO). This is a deliberate restriction to prevent creators from extracting value after attracting traders with cashback incentives.
How much has Pump.fun's revenue declined? Platform revenue dropped from $148.1 million in January 2025 to $31.8 million in January 2026, a 76% year-over-year decline.
Overview
Pump.fun launched Cashback Coins on February 17, 2026, introducing a permanent choice for token creators: keep the 0.3% creator fee or redirect it entirely to traders. The feature addresses mounting criticism that deployers profit from tokens they never develop, backed by Dune Analytics data showing only 0.02% of wallets reached millionaire status on the platform. With revenue down 76% year-over-year and the PUMP token's trading volume surging 56% on the news, this is Pump.fun's clearest attempt yet to reverse its declining user engagement by shifting economics in favor of traders. Whether it reignites the Solana memecoin launchpad or accelerates a race to the bottom in token quality will depend on which side of the creator-trader divide the market rewards.
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