Raydium Fights Back: Will Pump.Fun’s Secret AMM Plan Backfire?
In a dramatic twist for Solana’s DeFi landscape, Raydium has publicly challenged rumors that memecoin phenomenon Pump.Fun plans to launch its own automated market maker (AMM), calling such a move a potential “strategic miscalculation” that could undermine the platform’s remarkable success.
The controversy erupted Monday when Raydium core contributor InfraRAY took to X to address speculation that has sent RAY tokens plummeting over the weekend. Investors panicked after discovering evidence that Pump.Fun—the wildly successful memecoin factory—appears to be testing proprietary trading infrastructure that would replace Raydium’s liquidity pools.
“100%, revenue hit is real,” InfraRAY acknowledged to CoinDesk, while arguing that the market’s 30% devaluation of RAY tokens was “overblown” and partially influenced by SOL’s broader weakness.
The current arrangement between these Solana powerhouses has been mutually beneficial since Pump.Fun’s earliest days. Raydium captures trading fees from memecoins that graduate from Pump.Fun’s launchpad to its liquidity pools—a relationship that has significantly contributed to Raydium generating over $1 million in daily fees.
For perspective, Pump.Fun tokens currently account for more than 30% of Raydium’s daily trading volume, according to Dune Analytics data. This substantial portion could disappear if Pump.Fun implements its own AMM.
Despite amassing an impressive $500 million war chest from launch fees, Pump.Fun currently misses out on the long-term trading fee revenue from the tokens created on its platform. This financial incentive may be driving their apparent pivot.
InfraRAY warns that Pump.Fun’s potential AMM transition faces significant challenges, including “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,” he added.
When approached for comment, Pump.Fun co-founder Alon Cohen declined to provide any statement on the matter.
This developing situation represents a potential power shift in Solana’s DeFi ecosystem, with hundreds of millions in fee revenue potentially changing hands depending on Pump.Fun’s next move.
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