Raydium Criticizes Pump.Fun’s Possible AMM Shift as a Strategic Error

 
Ritu Lavania
Written By 
Ritu Lavania
 
Harsh Chauhan
Edited by 
Harsh Chauhan
February 25, 2025

As rumors around Pump.Fun, the memecoin creator, launching its own automated market maker (AMM) to replace Raydium’s liquidity pools started floating around, Raydium, Solana’s leading AMM has criticized the move.

Raydium Criticizes Pump.Fun’s AMM Replacement Move

InfraRAY, a core contributor to Raydium, called Pump.fun’s move a “strategic miscalculation” in a post on X, arguing that Pump.Fun could struggle to replicate its current success by creating its own infrastructure. It is worth mentioning that Raydium has been handling much of the trading volume and providing liquidity for tokens that graduate from the Pump.fun’s launchpad

Rumors of the replacement started doing rounds when some traders noticed Pump.Fun was testing an in-house AMM, likely aiming to eventually replace Raydium.

This potential transitional move would have significant implications for the Solana ecosystem, particularly with regards to decentralized tokens’ economics.

Currently, Raydium benefits heavily from the Pump.Fun partnership. Notably, the platform generates over $1 million daily in trading fees across all liquidity pools, with around 30%, coming from Pump.Fun tokens. If the replacement does take place, it would likely cause a substantial drop in Raydium’s daily trading volume and the associated fees.

While the market reacted sharply, with investors selling off RAY tokens, InfraRAY cautioned that this knee-jerk response was likely exaggerated. He acknowledged that a switch away from Raydium could hurt Pump.Fun’s revenue but suggested the market’s reaction was blown up by Solana’s own weakening performance.

He also pointed out several risks Pump.Fun would face if it moved to a new AMM, including potential infrastructure gaps, low demand for tokens after migration, and disappointing volume post-launch. InfraRAY voiced concerns that these issues may not be fully considered by Pump.Fun’s team.

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Ritu Lavania
Written by Ritu Lavania

Ritu Lavania is a versatile Web3 content creator with over three years of experience in the crypto space. She is part of the team at CryptoNewsZ, where she writes insightful and engaging content. She has also contributed to TheCryptoTimes and The Coin Edition, where her work has been well received by the crypto community. Skilled in research, creative writing, SEO, and cross-functional collaboration, she creates content tailored to diverse audiences. ionate about education, she dedicates time to teaching kids and expressing herself through poetry. Always eager to learn, she continuously explores new trends in blockchain and digital assets. She believes in the power of storytelling to make complex crypto topics more accessible and engaging for readers worldwide.