Pump.fun Tests Its Own AMM, Causing a Sharp Drop in Raydium (RAY)
Date: 2025-02-25 Author: Gabriel Deangelo Categories: BUSINESS
How did Pump.fun's AMM testing affect Raydium (RAY)?
Over the past 24 hours, the RAY token has fallen in price by 27.8%, reaching $3.05. At one point, the price dropped to $2.9, the lowest since October 2024.
The reason for this collapse was rumors about AMM testing on "amm.pump.fun". An on-chain analyst under the pseudonym "trenchdiver" was the first to discover this information and shared it on X (former Twitter). The news quickly spread, causing concern among market participants.
Raydium has long been a key AMM and liquidity provider on the Solana network, as well as a partner of Pump.fun. The platform allowed users to create memecoins at minimal cost, and Raydium provided them with liquidity. As new tokens grew in popularity, they were added to Raydium's trading pools, increasing volumes and earning 0.25% fees for exchange transactions.
However, recent events indicate a possible change in Pump.fun's strategy. If the platform does indeed intend to redirect trading volumes and fees to its own liquidity pools, this could seriously undermine Raydium's position in the decentralized exchange (DEX) ecosystem.
As an experiment, the first token added to the new liquidity pool was the CRACK memecoin. If this model is successful, Pump.fun could completely abandon Raydium, which would be a significant blow to its business.
Analysts note that such a move could lead to a redistribution of liquidity on Solana and the creation of new incentives for Pump.fun token holders. As a result, Raydium could lose not only its fee income, but also its dominant role in the ecosystem.
