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Raydium growth have been largely fuelled by the meme coin frenzy, and as Pump.fun starts getting serious competition in this arena, it is looking to keep the liquidity in it’s own ecosystem. Raydium’s RAY token plunged 30% in 24 hours amid speculation that Pump.fun, a leading Solana-based meme coin platform, is launching its own automated market maker (AMM).* If confirmed, this could threaten Raydium’s dominance as Solana’s main liquidity provider.
What Caused the Drop?
RAY’s price tumbled from $4.25 to $3.05 after a test version of Pump.fun’s AMM surfaced online. Investors fear that a Pump.fun AMM would pull liquidity away from Raydium, cutting into its trading volume and fee revenue. Although not officially confirmed, analysts suggest Pump.fun’s move aims to keep more liquidity within its own ecosystem.
Why It Matters
Raydium is a key platform for trading new Solana tokens, earning revenue from swap fees. If Pump.fun launches its AMM, it could divert trading activity, reducing Raydium’s market share. Pump.fun has already gained traction among meme coin creators, generating millions in daily fees.
Currently, only 1.4% of tokens launched on Pump.fun migrate to Raydium. A built-in AMM could keep liquidity within Pump.fun, making it a bigger competitor.
What’s Next?
If Pump.fun confirms its AMM, Raydium could see a sharp decline in trading activity and revenue. To stay competitive, Raydium may need to introduce new incentives or features for liquidity providers or even launch a competing meme coin platform.
So far, neither Pump.fun nor Raydium has commented on the speculation, leaving investors uncertain about what’s ahead.
*AMM (Automated Market Maker): A type of decentralized exchange that allows trading without traditional order books, using liquidity pools instead.
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