Pump.fun Launches PumpSwap, Challenges Raydium in Solana Memecoin Market

Pump.fun has introduced its own decentralized exchange (DEX) called PumpSwap, which could potentially replace Raydium as the primary trading platform for Solana (SOL) memecoins. Starting from March 20, memecoins that successfully bootstrap liquidity on Pump.fun will directly migrate to PumpSwap, as announced by Pump.fun in an X post. Previously, bonded Pump.fun tokens were migrated to Raydium, which had become Solana’s most popular DEX largely due to the trading activity of memecoins.

PumpSwap is designed to function similarly to Raydium V4 and Uniswap V2, aiming to create a frictionless environment for trading coins. According to Pump.fun, the new platform addresses the issue of migrations, which were previously a major point of friction, slowing down a coin’s momentum and introducing unnecessary complexity for new users. With PumpSwap, migrations now happen instantly and for free.

The launch of PumpSwap comes just days after Raydium announced plans to create its own memecoin launchpad called LaunchLab, directly competing with Pump.fun. This transition from partners to competitors is set to reshape Solana’s decentralized finance (DeFi) ecosystem, especially as memecoin trading volumes have significantly decreased from their January highs.

Pump.fun’s co-founder, Alon, welcomed the competition, stating that users ultimately benefit from it. Other emerging protocols, such as Daos.fun, GoFundMeme, and Pumpkin, are also vying for a share of Solana’s memecoin market. PumpSwap plans to adopt one of GoFundMeme’s popular features—revenue sharing with memecoin creators. According to Pump.fun, a percentage of protocol revenue will be shared with coin creators, potentially aligning creators with their communities and incentivizing higher-quality launches.

Despite the launch of PumpSwap, the overall activity in the memecoin market has declined. On February 27, it was reported that successful memecoin launches on Pump.fun had decreased by approximately 80% from January highs due to a series of memecoin-related scandals that cooled sentiment among retail traders. Consequently, Pump.fun’s average daily fee revenue dropped from over $4 million in January to just over $100,000 by mid-March.

Memecoins have been a significant driver of growth on Solana, with the chain’s total value locked (TVL) increasing from around $1.4 billion to over $9 billion in 2024. Raydium, in particular, benefited from this growth, with daily volumes soaring from around $245 million to over $2 billion over the course of the year. In January, Raydium launched a leveraged perpetual futures trading platform to challenge Jupiter, another top Solana DeFi protocol.