For months, Pump.fun and Raydium have been closely linked—Pump.fun made launching tokens easy, and Raydium provided the trading infrastructure. This partnership has driven significant volume to Raydium, making Pump.fun one of its largest contributors.
Now, Pump.fun is launching its own AMM (Automated Market Maker) to reduce reliance on Raydium.
This move raises key questions: How dependent have these platforms been on each other? What impact will this have on Raydium’s liquidity, fees, and RAY token?
Market Context: Solana’s Memecoin Boom and DEX Growth
Solana saw a surge in memecoin trading, driving DEX volumes to new highs. Based on Flipside data, over the past 90 days, Raydium’s daily volume ranged from $2.5 billion to $16 billion, with Pump.fun’s tokens accounting for a significant share.
Pump.fun’s Share in Raydium’s Liquidity and Trading Volume
On January 30, Pump.fun-related tokens made up 62.7% of all Raydium trades. Over the last 90 days, they averaged 43.5% of total volume. 
However, this figure has dropped below 20% in recent weeks, likely due to fading memecoin hype and negative sentiment around tokens like LIBRA and Melania by Kelsier.
Liquidity Pools and Their Role
Over the past 90 days, Raydium saw over 157,000 liquidity pools created, with 3,600+ tied to Pump.fun.
The highest share was on December 28, when 13% of new pools were Pump.fun-related. Recently, this number has fallen below 20 new pools per day.
Why Is Pump.fun Launching Its Own AMM?
Pump.fun is making this move for two main reasons:
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Reducing Dependency – Controlling its own AMM allows Pump.fun to avoid relying on Raydium’s infrastructure.
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Capturing Fees – Raydium charges swap fees, with a portion used for RAY token buybacks. By launching its own AMM, Pump.fun can keep these fees and strengthen its ecosystem.
The Potential Impact on Raydium
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Trading Volume Decline – Pump.fun tokens have contributed up to 43%+ of Raydium’s volume. Their departure could significantly reduce transaction activity.
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Liquidity Pools – Pump.fun tokens hold a relatively small share in the liquidity pools on Raydium. Most liquidity remains concentrated in core pools tied to SOL and stablecoins. Given this distribution, a significant decline in these pools seems unlikely.
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Revenue and Buyback Reduction – Over 90 days, Raydium earned $211M+ in fees, and allocated more than $90M for $RAY buyback. $40M (44.9%) coming from Pump.fun-related trades. Losing this revenue would reduce RAY buybacks and may impact its price.
Raydium’s market has already reacted—RAY’s price fell over 30% after the Pump.fun AMM news, reflecting concerns over revenue loss.
Pump.fun’s Shift and Its Impact on Solana’s DeFi Landscape
Pump.fun’s move marks a pivotal change in Solana’s DeFi ecosystem. With Raydium losing a key revenue stream, the platform must adapt to maintain its dominance.
However, as history shows, every token on Solana has found a place on Raydium, a long-established and trusted liquidity hub. Meanwhile, Pump.fun now faces the challenge of sustaining liquidity on its own AMM—a high-stakes move where even a small misstep could be costly.
The long-term effects remain uncertain. If Pump.fun succeeds, it could set a trend for other projects to follow, potentially shifting the balance of power in Solana’s DeFi space. But if it struggles, Raydium may continue to play a central role in trading these tokens.
Will Raydium adapt, or is this the start of a decline?
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