As rumors around Pump.Fun, the memecoin creator, launching its own automated market maker (AMM) to replace Raydium’s liquidity pools started floating around, Raydium, Solana’s leading AMM has criticized the move.
Raydium Criticizes Pump.Fun’s AMM Replacement Move
InfraRAY, a core contributor to Raydium, called Pump.fun’s move a “strategic miscalculation” in a post on X, arguing that Pump.Fun could struggle to replicate its current success by creating its own infrastructure. It is worth mentioning that Raydium has been handling much of the trading volume and providing liquidity for tokens that graduate from the Pump.fun’s launchpad
Rumors of the replacement started doing rounds when some traders noticed Pump.Fun was testing an in-house AMM, likely aiming to eventually replace Raydium.
EXCLUSIVE : @pumpdotfun is working on their own AMM liquidity pools, which is currently being tested on https://t.co/nuir86gnkl
It seems they are planning to have pump tokens graduate to their own pools instead of Raydium so they can either extract more fees on Solana or have… pic.twitter.com/svmWfl6Rlt
— trenchdiver (@trenchdiver101) February 24, 2025
This potential transitional move would have significant implications for the Solana ecosystem, particularly with regards to decentralized tokens’ economics.
Currently, Raydium benefits heavily from the Pump.Fun partnership. Notably, the platform generates over $1 million daily in trading fees across all liquidity pools, with around 30%, coming from Pump.Fun tokens. If the replacement does take place, it would likely cause a substantial drop in Raydium’s daily trading volume and the associated fees.
While the market reacted sharply, with investors selling off RAY tokens, InfraRAY cautioned that this knee-jerk response was likely exaggerated. He acknowledged that a switch away from Raydium could hurt Pump.Fun’s revenue but suggested the market’s reaction was blown up by Solana’s own weakening performance.
He also pointed out several risks Pump.Fun would face if it moved to a new AMM, including potential infrastructure gaps, low demand for tokens after migration, and disappointing volume post-launch. InfraRAY voiced concerns that these issues may not be fully considered by Pump.Fun’s team.
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