Pump.fun Launches Native Solana-based DEX PumpSwap to Revolutionize Token Launches

After months of speculation and buildup, Pump.fun, the leading token launchpad, has announced the successful launch of PumpSwap, a native Solana-based

The cryptocurrency market has seen its fair share of changes in recent months, especially within the memecoin sector. After months of speculation and buildup, leading token launchpad Pump.fun announced the successful launch of its native Solana-based decentralized exchange (DEX), named PumpSwap.

The launch of PumpSwap comes at a crucial time for the token launchpad. In recent times, Pump.fun has faced financial difficulties as revenue began to decline, and the platform is planning to launch PumpSwap as part of a broader strategy to restructure its revenue stream and adapt to the changing market dynamics.

What Is Happening?

After a stellar 2024, which saw new avenues of revenue and partnerships, the token launchpad has seen a decline in revenue in recent months.

According to DefiLlama, Pump.fun’s daily revenue has dropped from a high of 3,000 SOL in January to about 500 SOL in March. At January’s peak, the platform was generating an estimated $780,000 per day in revenue. However, by March, that figure had dropped to about $128,000.

This decrease can be attributed to several factors, including the slowdown of the memecoin ecosystem and the occurrence of several scandals.

Recently, the LIBRA (लीब्रा) memecoin, which was launched by an unknown developer, was a subject of discussion among crypto enthusiasts. The token’s price dropped by 95% after it reached a $4.5 billion market cap, raising concerns about insider benefits.

Reacting to the incident, Alon, the founder of the Blockchain service provider Pump.fun, stated that the project has no morals or ethics and that it’s a scam. He also noted that they are planning to take legal action.

After the incident, worries of insider trading spread and investor confidence was shaken. As a result, trading volumes dropped significantly.

According to Token Terminal, the monthly memecoin trading volume on all exchanges went down from about 206 billion in January to 99.5 billion in February.

Among the platforms that provide services for token launches on Solana, there is also fierce competition, especially from Raydium, which is preparing to launch its own memecoin launchpad called LaunchLab.

What Is Known About PumpSwap?

Pump.fun is launching PumpSwap V1 at a time when trading volumes are lagging and competition is heating up. Aiming for renewed growth in the token launch space, the service is focused on streamlining coin trading and improving the user experience.

PumpSwap offers a new way of launching a token without the traditional step of creating a liquidity pool on Raydium. Instead, tokens will launch immediately after completing their bonding curve, enabling instant and free migrations. This will eliminate the prior 6 SOL migration fee to Pump.fun, which they noted was a major friction point for users.

V1 of PumpSwap is an automated market maker (AMM), similar to Raydium V4 and Uniswap V2. On the platform, users can build and own liquidity pools, fund pools, and trade any tokens that are listed on the platform. It uses the same fee structure as other DEXs with a 0.25% fee per trade. From the 0.25%, 0.20% will go to liquidity providers and 0.05% will go to the protocol.

Pump.fun also plans to introduce a creator revenue-sharing model in which protocol revenue will be split with coin creators. The revenue share model will incentivize quality projects and ensure the creator and the community are aligned.

Moreover, Pump.fun has prioritized security and has had nine independent audits from well-recognized security firms. In the long term, they also plan to open-source the PumpSwap Program to improve security and transparency.

Although Pump.fun started as a memecoin platform, the platform has diversified with time, now supporting all kinds of tokens. Along with Pudgy Penguins (PENGU), users can now trade tokens belonging to verified partners like Aptos (APT), Tron (TRX), cbBTC by Coinbase and USDe by Ethena.

Last Thoughts

At the beginning of the year, the token launchpad was exploring various avenues to expand its revenue streams. Back in January, Pump.fun announced plans to introduce a subscription service.

The service, which was named “Pump.fun Premium,” was designed to offer members exclusive benefits and priority access to new products and services from the token launchpad.

At the time, Alon said they were working on expanding their product suite and forging strategic partnerships to ensure sustained growth and introduce new revenue streams.