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CoinDesk 2025-02-25 02:39:05

Pump.Fun's Rumored AMM Pivot a 'Strategic Miscalculation,' Says Raydium

Solana's dominant automated market maker (AMM) Raydium hit back Monday on rumors that major volume driver Pump.Fun was preparing to launch its own AMM. Abandoning Raydium whole hog would be a "strategic miscalculation" for the massively popular — and profitable — memecoin factory, core contributor InfraRAY said in a post on X. He cast doubt on the notion that Pump.Fun could replicate its success if it swaps Raydium out for in-house trading infrastructure. Token investors dumped RAY en-masse this weekend after hawkeyed observers noticed Pump.Fun was apparently testing its own AMM, presumably with the intent to replace Raydium's longstanding liquidity pools as its platform of choice. Such a move would shake up the economics of decentralized token trading on Solana. Right now, Raydium, the chain's largest AMM platform, captures trading fees generated by Pump.Fun memecoins that "graduated" from the launchpad to its own pools. The arrangement — in place since Pump.Fun's earliest days — has been a financial boon for Raydium But it also leaves Pump.Fun out of the long-term upside of the tokens its users create. That's not to say it's making nothing: Pump.Fun has amassed half a billion dollars on the fees it collects from early-stage token launches, one of crypto's grandest warchest. Raydium is currently generating over $1 million in fees every day from trading across all its liquidity pools, not just those of Pump.fun tokens. That said, over 30% of Raydium's daily trading volume comes from Pump.fun tokens, according to a Dune dashboard, meaning a good share of its fees could dry up if Pump.Fun switches away. "100%, revenue hit is real," InfraRAY said in a message to CoinDesk. But he cautioned that the market's 30% haircut on RAY tokens was "overblown" and partially due to SOL's own weakness. He said any pivot to a new AMM could hit myriad issues: inadequate supporting infrastructure, low demand for migrated tokens, a flop on volume at launch. "I think that’s a real risk they are overlooking but I could be wrong," InfraRAY said. Pump.Fun co-founder Alon Cohen declined to comment.