Radium (RAY) Falls 30% as Pump.Fun Test it Own AMM Liquidity Pool
Raydium's RAY token plummeted 30% due to Pump.fun's potential competing AMM, threatening Raydium's trading volume and revenue.
Raydium, a Solana-based decentralized exchange (DEX) and automated market maker (AMM) suffered a near 30% drop in its RAY token price on February 24th, 2025 according to CoinGecko data.
This sharp decline stemmed from speculation that Pump.fun, a popular memecoin launchpad, is developing its own AMM, potentially siphoning off a substantial portion of Raydium’s trading volume.
Pump.fun Test AMM Liquidity Pool
Evidence emerged on X, from an account named “trenchdiver,” showcasing a beta version of Pump.fun’s AMM, complete with its branding and active liquidity pool testing.
This development significantly impacts Raydium, as Pump.fun currently relies on Raydium for secondary trading of tokens completing their bonding curve process. An internal AMM would allow Pump. fun to retain this trading activity within its ecosystem.
“Trenchdiver” hypothesized that Pump.fun aims to increase revenue by charging higher swap fees than Raydium’s 0.25% standard. This aligns with observations by Gabriel Tramble of Shoal Research, who noted the higher fees common in the memecoin market could greatly boost Pump.fun’s profits.
DeFiLlama data supports this, showing Pump.fun accumulating over $500 million in fees since January 2024
Raydium Draws Possible Competition
Presto Research analyst Min Jung highlighted Raydium’s dependence on Pump.fun for trading volume, emphasizing the potential revenue loss if Pump.fun redirects this activity. Projects currently pay a significant 6 SOL (approximately $950) listing fee on Raydium’s more liquid pools.
However, a competing Pump.fun AMM could drastically alter this, potentially reducing Raydium’s swap volume and fee revenue. The appearance of a test token, Snowfall (CRACK), within Pump.fun’s purported test AMM, which saw a dramatic price surge and subsequent volatility, further fueled speculation.
Furthermore, while Pump.fun hasn’t officially commented, evidence strongly suggests its intention to create its own trading infrastructure. The implications are far-reaching; Raydium’s role as the primary trading venue for Solana-based tokens launched via Pump.fun is directly threatened.
The potential loss of trading volume could severely impact Raydium’s market position and its token price, a sentiment mirrored in the substantial drop in RAY’s value.
