Pump.fun’s AMM Testing Sparks Raydium (RAY) Sell-Off

Raydium's native token, RAY, has faced substantial declines amid growing speculation that Pump.fun, a leading Solana(SOL)-based meme coin launchpad, is testing its own Automated Market Maker (AMM).

Raydium’s native token (RAY) has seen substantial declines amid growing speculation that Pump.fun, a leading Solana (SOL)-based meme coin launchpad, is testing its own Automated Market Maker (AMM).

This move could potentially shift trading volume and fees away from Raydium and towards Pump.fun's own liquidity pools.

Pump.fun, known for enabling users to create and launch meme coins at a low cost, has had a close partnership with Raydium, a leading AMM and liquidity provider on Solana.

While Pump.fun facilitates meme coin launches, Raydium provides the liquidity infrastructure. Once these tokens gain traction, they enter Raydium’s trading pools, driving volume and generating swap fees.

Currently, Raydium charges a 0.25% swap fee, profiting from the trading activity that Pump.fun brings in.

However, Pump.fun's testing of its own AMM liquidity pools might change this dynamic.

If successful, Pump.fun could collect more fees on Solana or introduce new reward mechanisms for token holders, posing a direct challenge to Raydium's dominance in the decentralized exchange (DEX) ecosystem.

“This move could really hurt Raydium’s business,” an analyst said.

The first token integrated into Pump.fun's experimental liquidity pool is reportedly the CRACK meme coin.

If these pools prove successful, Pump.fun could reduce its reliance on Raydium entirely, breaking the partnership that has historically fueled Raydium's growth.

As a result, Raydium may be forced to adjust its strategy or risk losing a key revenue source. The battle for Solana’s liquidity is heating up, and the market is already reacting.