Raydium’s Price Plummets on Competition Concerns
Raydium (RAY), a Solana-based decentralized exchange and automated market maker (AMM), saw its token price fall 28% in 24 hours after Pump.fun appeared to be testing its own AMM functionality.
RAY fell to $3.09, reacting to Pump.fun’s potential move to redirect trading volumes away from Raydium.
How Pump.fun’s AMM Feature Impacts Raydium
Pump.fun, a memecoin launchpad, currently uses Raydium’s AMM for liquidity migration when a token reaches $69,000 market capitalization. However, with Pump.fun developing its own AMM, trading volumes and fee revenues could shift away from Raydium.
According to Nick Ruck, Director at LVRG Research:
“Pump.fun’s AMM could significantly reduce Raydium’s fee revenue and liquidity provider incentives.”
The new AMM feature was first identified by X user @trenchdiver101, who shared screenshots suggesting Pump.fun may be preparing a wider rollout.
Memecoin Market and Raydium’s Future
Pump.fun generated over $120 million in trading fees last month, highlighting its rapid market impact. If Pump.fun fully integrates AMM services, Raydium could lose a significant portion of its trading volume.
Raydium's response to the competition remains uncertain, but traders anticipate potential future rewards or lending products as countermeasures.
