- PumpFun is testing an in-house AMM, potentially reducing reliance on Raydium for liquidity and trading of newly launched tokens.
- Raydium may face a significant drop in trading volume if PumpFun successfully transitions to its internal liquidity system.
PumpFun, the Solana-based platform best known for launching memecoins, is testing its own in-house Automated Market Maker (AMM).
That development might cause Raydium to be less relied upon as the main source of token liquidity born in the PumpFun ecosystem. Should the shift be effective, Solana’s memecoin market could undergo a significant turning point.
NEW: @PUMPDOTFUN SILENTLY LAUNCHES THEIR OWN AMM , WHICH IS BEING TESTED ON https://t.co/80zLnXE8QY pic.twitter.com/p1mNIK3FRj
— Degen Radar (@Degen_Radar) February 24, 2025
New Strategy: Reducing Reliance on Raydium
Every token released on PumpFun today passes through Raydium in order to get liquidity and market hosting. However, with an in-house AMM, PumpFun can facilitate trading directly on its own platform. This gives more control over liquidity and maybe more income from transaction fees hitherto enjoyed by third parties.
According to sources, a new domain—amm.pump.fun—has started internal testing. Although it hasn’t been stated officially, many believe this is part of PumpFun’s strategy to lessen dependency on Raydium. If completely carried out, this move might enable PumpFun to be more autonomous and effective in managing the tokens it supports.
Market Shake-Up: Raydium Faces Potential Volume Decline
Not everyone, notably Raydium investors, is delighted about the news. Since the rumor broke, the RAY token’s price has dropped more than 20%. The primary issue is that Raydium may lose a lot of market share should PumpFun migrate all of its trading activity to an internal AMM.
Based on this scenario, one analyst said Raydium would experience a 30% to 50% decrease in trading volume. This might wipe Raydium’s hegemony on the Solana network, not just a minor adjustment. Some in Raydium, nevertheless, seem not really bothered. They think they have plenty of space to survive even if volume may be lost.
PumpFun’s Future: Smart Move or Big Mistake?
Constructing your own AMM is not a decision to be taken lightly either. Strong security, appealing incentives, and lots of liquidity are prerequisites for decentralized trading infrastructure if it is to compete with conventional platforms. Should improper management be neglected, this action could backfire for PumpFun itself.
On the other hand, CNF previously reported that PumpFun has shown their determination to keep the ecosystem clean. They recently delisted tokens associated with the Bybit hacker after discovering that their platform was being used to launder stolen funds.
The hacker used PumpFun to launch the memecoin ‘QinShihuang,’ transacting $26 million worth of tokens in just three hours before it was eventually shut down.
This decision reveals that PumpFun wants to build a more transparent and safe ecosystem in addition to being a memecoin launchpad. Should their in-house AMM launch, it might be a significant step toward that aim.
Many people still doubt whether PumpFun’s in-house AMM would actually replace Raydium or only complement it. Still, the Solana market is clearly in a transitional state. Big players like PumpFun are beginning to create their own systems instead of depending just on other parties.
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