Raydium Token Crashes 22% as Pump.fun Appears Set to Launch Rival Trading System

Raydium Token Drops 22% as Pump.fun's AMM Development Sparks Competition Concerns

  • Raydium’s RAY token experienced a 22% decline amid speculation about Pump.fun’s new AMM development.
  • The potential launch of Pump.fun’s AMM could redirect significant trading volume away from Raydium’s platform.
  • Currently, projects pay 6 SOL (approximately $950) to migrate to Raydium’s trading pools.
  • Pump.fun has achieved remarkable success, processing over $5.3 million in daily fees at peak performance.
  • Only 1.4% of tokens launched on Pump.fun advance to Raydium’s pools, with few reaching $1 million market cap.

Raydium’s native token RAY plunged 22% to $3.28 over the past 24 hours, according to GeckoTerminal data, as market participants reacted to indications that Pump.fun is developing its own automated market-making system.

- Advertisement -

The sharp decline follows the discovery of a test version of an automated market maker (AMM) that could challenge Raydium’s dominance in the Solana ecosystem. AMMs are decentralized trading systems that use mathematical formulas and liquidity pools to automatically determine asset prices, eliminating the need for traditional order books.

“Raydium has benefited significantly from Pump.fun, as graduated tokens have historically migrated to its AMM, where it charges a 0.25% fee on swaps,” explained Min Jung, an analyst at Presto Research.

The emerging competition threatens Raydium’s position as the primary trading venue for new Solana tokens. Currently, projects must pay 6 SOL (approximately $950) to “graduate” their tokens to Raydium’s more liquid trading pools.

Pump.fun’s fee structure documentation suggests the platform could implement competitive trading fees to match Raydium, though specific details remain undefined during the testing phase.

Historical data shows Pump.fun’s remarkable growth trajectory, processing over $5.3 million in daily fees at its peak. However, the platform’s conversion rate to Raydium remains low, with only 1.4% of launched tokens progressing to Raydium’s pools, and fewer than a hundred achieving a market capitalization above $1 million.

The situation highlights the evolving dynamics of decentralized exchanges in the Solana ecosystem, where established platforms face increasing competition from innovative newcomers. Neither Pump.fun nor Raydium representatives have officially commented on the developments.

- Advertisement -

✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.

Previous Articles:

- Advertisement -

Latest News

Nissan Recalls 480,000 Vehicles; Stock Surges Despite Engine Issue

Nissan is recalling over 480,000 vehicles in the U.S. and Canada due to engine...

Bitcoin Risks $2.67B in Longs if Price Falls Below $108K Level

Bitcoin's price approaches its all-time high, with traders watching for signs of a breakout...

CrowdStrike Stock Hits Record High After Analysts Hike Price Target

CrowdStrike Holdings (CRWD) stock reached an all-time high with a gain of more than...

Amber International Raises $25.5M to Grow $100M Crypto Reserve Fund

Amber International Holding raised $25.5 million in a private placement to expand its $100...

Traders Flock to Hyperliquid Apps Amid Hopes for Airdrop Rewards

Investors are moving millions into projects on the Hyperliquid blockchain in hopes of future...

Must Read

Top 5 Testing Tools For Blockchain Applications in 2022

Blockchain apps have been adopted popularly by some prominent industries due to its being a decentralized-designed technology. Furthermore, these apps eliminate the risks that...