Raydium's RAY Token Crashes 30% as Pump.fun Preps Rival AMM Launch

Raydium’s RAY token plunged 22% amid rumors that meme coin launchpad Pump.fun is developing its own automated market maker (AMM), potentially challenging Raydium’s dominance.

RAY dropped to $2.99 and is still down 15% over the past hours on Bincnce.

Speculation about Pump.fun's AMM comes after a test version of the platform was spotted online, hinting that it could divert significant trading volume from Raydium.

"Raydium has benefitted from Pump.fun's meme coin launches, but if Pump.fun rolls out its own AMM, it could threaten Raydium's market share," said Min Jung, analyst at Presto Research.

AMMs use algorithms to automatically adjust asset prices based on supply and demand, eliminating traditional order books. Raydium’s AMM charges a 0.25% fee on swaps, and its pools have been a go-to for new Solana tokens.

However, Pump.fun's potential move into the AMM space could reduce Raydium’s swap volumes and lower fee revenue, according to analysts. The platform currently charges projects 6 SOL (around $950) to list tokens in its pools.

Pump.fun’s explosive growth has seen it process over $5.3 million in daily fees at its peak, though only a small fraction of tokens launched on the platform make it to Raydium’s pools.

Raydium has yet to comment on the situation, and Pump.fun has not responded to inquiries. Stay tuned folks!
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