Pump.fun, a well-known memecoin launchpad on Solana, has officially launched its own DEX AMM PumpSwap.
The announcement of the launch was made yesterday by the platform’s official X profile.
The new DEX is already active, since from yesterday all the tokens that complete their bonding curve will migrate directly to PumpSwap.
PumpSwap: the new DEX by Pump.fun that challenges Raydium
Pump.fun, before launching its DEX, used Raydium, the main DEX on Solana, but now it will use only PumpSwap.
Note that in less than 24 hours the new DEX has already surpassed 15 million dollars of TVL, even though they pale in comparison to the 74 million dollars of daily volume on Pump.fun.
Note that the current volumes are moreover very low, because the peak was reached on January 24 above $390 million.
Raydium, instead, on the day of the launch of Trump’s memecoin on Solana reached the incredible figure of 11 billion dollars in daily trading volume. Currently, it has a TVL exceeding 1.1 billion dollars.
How does PumpSwap work? An introduction to the new DEX by Pump.fun
On the new DEX by Pump.fun, instant migrations with zero fees have been enabled, and there will be greater liquidity compared to the platform.
Furthermore, it has been announced that soon the new DEX will also enable revenue sharing with the creators.
PumpSwap V1 is a decentralized exchange on Solana that operates similarly to Raydium V4 and Uniswap V2, thanks to its Constant Product AMM that allows the creation of liquidity pools for free.
Pump.fun states that it wanted to create its own DEX because their goal is to create an environment as smooth as possible for token trading, and until today an important point of friction has been precisely the migrations from the platform to the DEX, because they slowed down the momentum of new tokens and introduced unnecessary complexities for new users.
Now, however, the migrations on the new DEX are instantaneous and free.
This launch also moves towards the creation of a more sustainable ecosystem, given that soon a percentage of the DEX revenues will be shared with the token creators.
The exchange fees on PumpSwap are 0.25%, of which 0.20% goes to the liquidity providers, while 0.05% remains with the protocol.
Raydium responds to Pump.fun by launching LaunchLab
The reaction of Raydium occurred already the day before the launch of PumpSwap.
This is the launch of an alternative platform to Pump.fun called LaunchLab.
In this way, he hopes to feel little impact from the abandonment by Pump.fun. It should be noted that in the last 30 days, a significant 41% of Raydium’s swap fees came from tokens created on Pump.fun.
Moreover, LaunchLab should be a direct fork of Pump.fun, even though it has not been launched yet.
An anonymous source within the Raydium development team revealed that LaunchLab had actually been in development for months, but the project had been temporarily shelved to avoid creating direct competition with Pump.fun.
Performance of the RAY token after the news introduced by Pump.fun
Raydium in turn has its own token, RAY, which did not seem to have reacted well to the news of the launch of a DEX by Pump.fun.
In reality, the current price of about $1.7 is perfectly in line with that of, for example, last week, also because before dropping yesterday, it had risen to over $1.9. Yesterday’s news, therefore, did nothing but cancel out the recent gains.
Note that the current price is still even 90% lower than the all-time highs of 2021, even though at the beginning of the year it seemed like it could recover.
The fact is that the bear-market of 2022 for RAY continued into 2023, and during 2024 the recovery was only very partial, before the electoral victory of Trump.
The bottom of this bear-market was reached in December 2022 at $0.13, and by October of the following year, it had only risen to $0.20.
The rise at the end of 2023 had brought it back to $1.6, a figure not far from the current one and still extremely lower than the almost $17 of September 2021.
In 2024, it first managed to climb back to $2.6, and then with Trump’s victory, it rose to $6.3. With the launch of Trump’s memecoins, it went above $8, but only to then crash first below $5 and then even below $2.5.
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