Pump.fun Challenges Raydium's Dominance with In-House AMM

Pump.fun, a prominent Solana-based memecoin launchpad, is reportedly developing an in-house automated market maker (AMM) to potentially challenge Raydium's dominance as the leading decentralized exchange for memecoins. The news, first reported by Aggr News, has sparked a significant reaction in the market, with Raydium's RAY token experiencing a sharp decline.

The new AMM is currently in internal testing and, if launched, could significantly alter the liquidity dynamics within the Solana ecosystem. Currently, only a minority of tokens from Pump.fun are transferred to Raydium. By retaining liquidity on its own platform, Pump.fun could have a substantial impact on Raydium's market share. Analysts predict a potential 30%-50% decline in Raydium's trading volume if Pump.fun proceeds with the launch, indicating intensifying competition in the decentralized finance market.

Pump.fun's AMM technology could extend beyond trading volume, potentially introducing new features such as memecoin perpetuals and lending. The X community has forecasted that the platform could solidify its market leadership in Solana's memecoin economy. DeFiLlama data shows that Pump.fun has already accumulated over $500 million in swap fees, further strengthening its financial position and ability to maintain standalone liquidity solutions.

This move follows Pump.fun's recent involvement in the reported $1.4 billion Bybit hack. The platform successfully prevented hackers from laundering stolen cash through a memecoin issuance, halting an over $26 million false transaction. The blockchain data identified the attackers who attempted to use Pump.fun for fake trading volume. The platform swiftly reacted to fend off the ill-intentioned move, demonstrating its growing power within decentralized finance.

The increasing influence of Pump.fun within the decentralized finance space is becoming more apparent. Co-founder Alon Cohen has referred to the site as "the biggest attention marketplace on the internet," highlighting its ability to absorb market momentum. With its AMM in the testing phase, Pump.fun is poised to take its place among the leaders in Solana's memecoin space, redefining control and exchange of liquidity within it.