Pump.fun Launches PumpSwap DEX, Moves Away from Raydium

Quick Summary: Pump.fun has introduced its own decentralized exchange (DEX), PumpSwap, aiming to replace Raydium as the primary trading platform for Solana-based memecoins. This move comes amid heightened competition and declining memecoin activity.

PumpSwap to Replace Raydium for Memecoin Trading

Pump.fun, a popular platform for launching Solana-based memecoins, has officially launched its decentralized exchange, PumpSwap. Starting March 20, tokens that successfully bootstrap liquidity (“bond”) on Pump.fun will migrate directly to PumpSwap, bypassing Raydium entirely.

Previously, Pump.fun tokens migrated to Raydium, which had become Solana’s leading DEX largely due to memecoin trading activity. PumpSwap is designed similarly to Raydium V4 and Uniswap V2, aiming to provide a frictionless trading environment.

“Migrations were a major point of friction—they slow a coin’s momentum and introduce needless complexity for new users,” Pump.fun stated. “Now, migrations happen instantly and for free.”

Heightened Competition in Solana’s Memecoin Market

The launch of PumpSwap follows closely after Raydium announced plans to create its own memecoin launchpad, LaunchLab, directly competing with Pump.fun. This shift from partnership to competition could significantly reshape Solana’s decentralized finance (DeFi) landscape.

“We welcome competition because users win at the end of the day,” said Alon, a co-founder of Pump.fun.

Other emerging platforms, including Daos.fun, GoFundMeme, and Pumpkin, are also competing for market share. PumpSwap plans to adopt revenue-sharing features similar to GoFundMeme, allocating a percentage of protocol revenue to memecoin creators.

Declining Memecoin Activity and Revenue

Memecoin activity on Solana has significantly declined since January, following several scandals that dampened retail trader enthusiasm. Successful memecoin launches on Pump.fun dropped by approximately 80% from January highs, and daily fee revenue fell from over $4 million to around $1 million by mid-March.

Despite the recent downturn, memecoins were a major driver of Solana’s growth in 2024, pushing the chain’s total value locked (TVL) from $1.4 billion to over $9 billion. Raydium benefited greatly from this surge, with daily trading volumes rising from $245 million to over $2 billion during the same period.

Key Points:

• Pump.fun launches PumpSwap DEX, replacing Raydium for memecoin trading.
• PumpSwap aims to simplify token migrations and reduce friction.
• Raydium responds with its own memecoin launchpad, LaunchLab.
• Competition intensifies among Solana-based memecoin platforms.
• Memecoin activity and revenues have significantly declined since January.