Pump.fun self-hosted AMM, can Raydium still monopolize the meme liquidity pool?

By: blockbeats|2025/02/25 15:45:02
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Original Author: CryptoBaci, Crypto Researcher
Original Translation: ChatGPT

Editor's Note: This article analyzes Pump.fun's launch of a new AMM challenging Raydium's monopoly position. Pump.fun aims to reduce reliance on Raydium through an independent liquidity pool, potentially causing liquidity outflow and impacting Raydium's market share. The article also discusses the advantages and risks of the new AMM, especially liquidity issues and potential vulnerabilities.

The following is the original content (slightly rephrased for better readability):

Pump.fun has just introduced its own AMM, which may indicate that Pump.fun is no longer relying on Raydium. They have launched their own liquidity pool, and liquidity may begin to shift away from Raydium. This implies:

• Meme coins may no longer need Raydium.

• Pump.fun will keep all fees within its own ecosystem.

• There may be LP rewards (similar to other DEXs).

The first test token $CRACK has been added to the liquidity pool.

Pump.fun self-hosted AMM, can Raydium still monopolize the meme liquidity pool?

So far, all Meme coin liquidity has relied on Raydium. But now:

• You create a token and it can be traded immediately.

• Traders do not need to switch platforms.

• Pump.fun is becoming a fully independent ecosystem.

This may shift the power balance on Solana.

Advantages of the new AMM:

• Instant liquidity without relying on external platforms.

• Fully integrated with Pump.fun.

• Early opportunities for traders → arbitrage and potential system vulnerabilities.

• If this project is successful, it is an early opportunity to enter a new market.

Risks and Drawbacks:

• Still in beta stage → potential vulnerabilities and security risks.

• Liquidity has not reached Raydium's depth yet.

• There is no guarantee that traders will fully migrate to this AMM.

It's either Pump.fun dominates the market share, or this AMM remains niche.

How does this affect $RAY?

Raydium has already felt the pressure. $RAY dropped 10% after the AMM release news. Why?

• If liquidity starts flowing out, Raydium's pool revenues will be impacted.

• Decrease in trading volume = reduced interest in the DEX = further price decline.

• If this trend continues, $RAY could face an even bigger hit.

Raydium is losing control of Solana liquidity.

What to do next?

• Try the new AMM.

• Monitor liquidity and new tokens.

• Continue to observe Raydium's performance—can they defend their position?

Original Article Link

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