Pump.fun's AMM Shakes Solana, Raydium Token Plunges

Rumors of Pump.fun's plans to launch its own automated market maker (AMM) have sent shockwaves through the Solana ecosystem, leading to a significant decline in the price of Raydium Token (RAY). The news, which surfaced on February 24, 2025, suggests that Pump.fun may be preparing to host its own liquidity pools, potentially disrupting Raydium's dominance in the meme coin niche.

Pump.fun, a popular Solana-based meme coin launchpad, is reportedly testing an AMM that could change how tokens launched on its platform handle liquidity. If implemented, this development might reduce the platform's reliance on Raydium, the decentralized exchange that currently facilitates trading for tokens graduating from Pump.fun.

The first indications of an in-house AMM surfaced when Aggr News, an X-based news aggregator, spotted a new liquidity pool under the domain amm.pump.fun. This internal test suggests that Pump.fun may be preparing to host its own liquidity pools rather than directing traffic to Raydium.

The information gained traction after an X user, "trenchdiver," claimed on February 24 that Pump.fun was actively working on its own AMM system. A link shared by the user leads to a website displaying an AMM interface with Pump.fun's branding, indicating that the feature is in beta testing.

Currently, when a token on Pump.fun completes its bonding curve—a structured pricing model—it transitions to Raydium for trading. If Pump.fun launches its own AMM, it could keep that liquidity within its own ecosystem instead of directing it elsewhere.

Further speculation emerged after an onchain transaction dated February 20 showed what appears to be Pump.fun's first test token added to its AMM liquidity pool. The token, named Snowfall (CRACK), seemingly a reference to a 2017 TV series, saw a sharp rise, reaching a peak market capitalization of $5.4 million within an hour of Trenchdiver's post. However, its value has since experienced heavy fluctuations, with a 40% decline in price bringing its market capitalization down to approximately $1.8 million.

Pump.fun's AMM plans have hit Raydium hard, with the RAY token dropping 2