Pump.fun Launches PumpSwap DEX, Moves Away from Raydium
Pump.fun has introduced its own decentralized exchange (DEX), PumpSwap, signaling a shift away from Raydium as the primary trading platform for Solana (SOL) memecoins.
Key Points:
- Pump.fun launches PumpSwap, its own decentralized exchange.
- Previously, Pump.fun tokens migrated to Raydium after liquidity bootstrapping.
- Starting March 20, tokens bonded on Pump.fun will migrate directly to PumpSwap.
- PumpSwap aims to reduce friction and complexity in memecoin trading.
- Raydium recently announced its own memecoin launchpad, LaunchLab, intensifying competition.
- PumpSwap plans to introduce revenue-sharing with memecoin creators.
Reducing Trading Friction
Pump.fun stated that PumpSwap operates similarly to Raydium V4 and Uniswap V2, designed specifically to streamline the trading experience. Previously, token migrations to Raydium slowed momentum and complicated user onboarding. Now, migrations will occur instantly and without cost.
Competition Heats Up
The launch of PumpSwap follows Raydium’s recent announcement of LaunchLab, a memecoin launchpad designed to compete directly 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 Pump.fun co-founder.
Other emerging platforms, including Daos.fun, GoFundMeme, and Pumpkin, are also competing for market share in Solana’s memecoin ecosystem.
Revenue Sharing Model
PumpSwap intends to adopt a revenue-sharing model similar to GoFundMeme, allocating a portion of protocol revenue to memecoin creators. This approach aims to align creators’ incentives with their communities and encourage higher-quality token launches.
Declining Memecoin Activity
Memecoin trading activity has significantly declined since January, following several scandals that dampened retail investor enthusiasm. Pump.fun’s daily fee revenue dropped from over $4 million in January to approximately $1 million by mid-March.
Despite the recent downturn, memecoins were a major driver of Solana’s growth in 2024, boosting the chain’s total value locked (TVL) from $1.4 billion to over $9 billion. Raydium benefited greatly, with daily trading volumes rising from $245 million to over $2 billion during the same period.
