Raydium’s RAY Token Plunges 22% Amid Pump.fun’s AMM Speculation

Raydium’s RAY Token Faces Crisis as Pump.fun Prepares to Launch Its Own AMM

Raydium’s RAY token has experienced a significant downturn, plummeting by 22% in the past 24 hours to $3.28. The token continued its downward spiral, dipping an additional 5% in the last hour, according to data from GeckoTerminal. This drop follows growing concerns over the launch of Pump.fun’s potential Automated Market Maker (AMM) system, which could directly compete with Raydium’s platform.

Pump.fun’s Test AMM Causes Uncertainty for Raydium

A recent discovery of a test version of Pump.fun’s AMM has sparked speculation that the platform is preparing to launch its own AMM system, threatening Raydium’s position as the go-to trading venue for Solana-based tokens. According to Min Jung, an analyst at Presto Research, Raydium has significantly benefited from Pump.fun in the past, as tokens that graduate from the platform typically flow into Raydium’s AMM, which charges a 0.25% fee on swaps.

If Pump.fun moves forward with its AMM, it could capture a portion of the trading volume that previously went to Raydium. This shift would lead to a reduction in swap volumes on Raydium and, in turn, lower its fee revenue.

Pump.fun’s Potential to Disrupt the Market

While Pump.fun has not officially confirmed its AMM launch, internal testing by Decrypt indicates that its security certificates point to the Pump.fun platform, though domain names do not yet reflect the final product. The fee structure outlined in the site’s terms and conditions suggests the platform could introduce competitive trading fees to rival Raydium’s, although specific details remain unclear as the site appears to be in a testing phase.

Despite only 1.4% of tokens launched on Pump.fun progressing to Raydium’s pools, the platform’s meteoric rise, processing over $5.3 million in daily fees at its peak, shows the growing influence it may wield in the Solana ecosystem.

As the situation develops, Raydium’s dominance could be under pressure, especially if Pump.fun launches its own AMM and attracts a larger share of liquidity from Solana projects.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.