Sunpump 100% On-Chain Buyback and Burn Process Underway

In a recent X (formerly known as Twitter) post on 3 September, Tron Founder Justin Sun announced that SunPump will implement a 100% on-chain buyback and burn process.

This initiative reflects Sun's commitment to improving the blockchain's profitability and is a strategic move to enhance SunPump's position amidst the growing competition in the meme coin market.

Originally, the community had proposed burning liquidity pool (LP) tokens, but Sun decided to pursue the buyback and burn method, similar to strategies used by projects like Shiba Inu.

Sun noted:

“After discussion, the community agreed that a better approach would be to directly implement a 100% on-chain buyback and burn process. This method is easier to verify, as all fund burn records will be on-chain, making it straightforward and eliminating the need for any explanations.”

Sun highlighted several benefits of this approach, including increased token liquidity and compliance.

However, he also noted challenges, such as potential difficulties in explaining the process and possible misunderstandings within the community.

SunPump's ongoing buyback and burn process can be viewed here.

Sun Believes 100% On-Chain Buyback is the Correct Move

Inspired by successful memecoins like Shiba Inu, which is currently priced at $0.00001331 per token, the initial plan was to burn LP tokens to enhance token liquidity depth.

This strategy is intended to make liquidity more regulator-friendly and usable.

However, due to the complexities of LP token burning, Sun advocates for a 100% on-chain buyback process.

He argues that this method simplifies verification and ensures transparency, as all transactions are recorded directly on-chain.

This approach eliminates the need for additional explanations and provides a straightforward mechanism for fund burns.

Sun also notes that this buyback and burn strategy is not unique to SunPump; similar practices are employed by Binance, which uses a portion of its profits to buy back and burn its BNB token.

The process is expected to be completed in a few days.

Not All in Favour of SunPump's 100% Buyback Model

Not all members of the community support a 100% on-chain buyback approach; some advocate for a more comprehensive strategy.

Ben Todar, founder and chairman of Chainscard, has expressed concerns that an exclusive focus on buyback and burn might overlook the vital role of liquidity.

He argues that liquidity is essential for both the growth and stability of a token, suggesting that a balanced approach could better support long-term success.

SUN Token Price Dips Over 10% After Sun's Announcement

The price of Sun Token (SUN) fell over 8% within the past 24 hours, following the announcement by Tron founder Justin Sun of a 100% on-chain buyback and burn programme for SunPump.

Currently trading at $0.02836, SUN has experienced a 10.46% decline over the last day and a 9.64% drop over the past week.

Despite this recent downturn, the token remains significantly up by more than 192% over the past month, according to CoinMarketCap.