Pump.fun Sets Up Its Own AMM Liquidity Pools, Targeting Raydium's Business

Pump.fun, the leading launchpad for launching Solana-based meme coins, is reportedly setting up its own liquidity pools its own Automated Market Maker (AMM) liquidity pools

Pump.fun, a Solana-based meme coin launchpad, is setting up its own Automated Market Maker (AMM) liquidity pools, according to recent developments. The beta testing phase has begun with the addition of the $CRACK token to these pools.

This move by Pump.fun will provide projects launched on the platform with an alternative liquidity solution to the existing decentralized exchanges like Raydium. The platform’s own AMM will allow them to migrate their tokens instead.

This development is seen as a strategic move by Pump.fun to gain greater control over the liquidity and trading of tokens launched on its platform. According to industry observers, the move would enable Pump.fun to capture a larger share of trading fees within the Solana ecosystem or implement mechanisms to directly reward token holders.

In a recent post, Marty Party highlighted the potential impact of Pump.fun’s AMM on Raydium’s business. He mentioned that T Pump.fun plans to charge higher fees and offer more rewards to their token holders, which has already led to Raydium’s price dropping sharply by 22.9% to reach $3.30.

“Raydium will need to add new features and come up with new ideas to keep up,” he stated in his post.

According to the post, the $CRACK token has become the inaugural test token added to Pump.fun’s AMM liquidity pool. This token plays a crucial role in the platform’s beta testing phase, providing valuable data and insights into the functionality and performance of the new AMM.

Pump.fun’s $CRACK Token Test

The transaction highlighted in the above chart confirms a transfer of 1,000 $CRACK tokens with the new AMM. This demonstrates the token’s active use within the testing environment.

The platform’s decision to develop its own AMM could have far-reaching implications for the Solana ecosystem. By providing projects with a dedicated liquidity solution, Pump.fun could potentially attract a larger number of developers and users to its platform. Furthermore, the ability to directly reward token holders through the AMM could create a more engaged and loyal community.

However, the success of Pump.fun’s AMM will depend on its ability to compete with established decentralized exchanges and attract sufficient liquidity. The platform will also need to address potential security concerns and ensure a seamless user experience. The coming weeks and months will be crucial in determining the impact of Pump.fun’s AMM on the Solana ecosystem and the broader cryptocurrency market.