SunPump Chooses Onchain Buyback Over Complex LP Token Burning
- WBOYOriginal
- 2024-09-04 09:04:12593browse
Justin Sun, the founder of Tron, announced that the SunPump meme coin community decided to replace LP token burning with a 100% onchain buyback
Justin Sun, the founder of Tron, has announced that the SunPump meme coin community has decided to do away with LP token burning in favor of a 100% onchain buyback and burn process, effective September 3.
The decision was made after the community encountered complexities and misunderstandings surrounding LP token burning, a practice that has become increasingly common among meme coins.
According to Sun’s post on X, the community had initially considered following other popular meme coins, such as Shiba Inu (SHIB), in burning LP tokens. This process involves burning a portion of the liquidity pool tokens, which can increase “token liquidity depth” while keeping the burned liquidity usable, an approach that aligns more closely with regulatory expectations.
However, due to the complexities involved, Sun proposed a shift to a 100% onchain buyback and burn process, which he maintained would be more straightforward and transparent.
The onchain buyback and burn process records all transactions on the blockchain, allowing for easy verification. This method addresses the challenges of LP token burning while ensuring transparency for the SunPump community.
The SunPump coin will fully adopt the onchain buyback and burn process starting September 3, in line with the community’s preference for simplicity and transparency. According to Sun, this method is “easier to verify” and “more straightforward” than LP token burning.
Notably, the onchain buyback and burn process ensures that every fund used for the buyback is recorded on the blockchain, providing immutable verification. Correspondingly, this method is similar to practices by other major players like Binance, which uses a portion of its profits to buy back and burn its BNB tokens.
In related news, SunPump has been dominating Pump.fun with higher token launches and revenue generation. On August 21, SunPump surpassed its Solana-based predecessor, Pump.fun, in daily revenue and activity. According to blockchain researcher Adam, SunPump launched 7,351 tokens and generated $585,000 in revenue. Comparatively, Pump.fun launched 6,701 tokens and earned $366,000 in revenue.
Above all, the onchain buyback and burn process will now be a core part of SunPump’s strategy, reflecting the community’s preference for transparency and straightforward processes.
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