Raydium Hits Back at Rumors That Pump.Fun Is Preparing to Launch Its Own AMM

Abandoning Raydium whole hog would be a "strategic miscalculation" for the massively popular — and profitable — memecoin factory

Solana's (SOL) dominant automated market maker (AMM) hit back Monday on rumors that a major volume driver on its platform is preparing to launch its own AMM.

Rumors that Pump.Fun is preparing to launch its own AMM have circulated for months, and picked up steam on Monday as sharp-eyed observers noticed the platform was testing its own AMM.

The move would be a blow to Raydium, which has enjoyed a close relationship with Pump.Fun since its early days. Pump.Fun memecoins that “graduate” from the launchpad to their own pools on Raydium continue to pay trading fees to the platform.

The arrangement has been a boon for Raydium, which is currently generating over $1 million in fees every day from trading across all its liquidity pools. Over 30% of Raydium's daily trading volume comes from Pump.Fun tokens, according to a Dune dashboard.

Token investors appeared to react to the rumors on Monday, with the price of RAY governance tokens dropping by over 30%. The broader market downturn and rumors of Pump.Fun's impending AMM launch also hit Solana NFT marketplace Magic Eden, with its EDEN governance tokens falling by over 50%.

"100%, revenue hit is real,” a core contributor to Raydium known as InfraRAY said in a message to CoinDesk on Monday.

InfraRAY, who goes by Infra and is a contributor to Raydium's codebase, cast doubt on the notion that Pump.Fun could replicate its success if it swaps Raydium out for in-house trading infrastructure.

He cast doubt on the notion that Pump.Fun could replicate its success if it swaps Raydium out for in-house trading infrastructure. But he cautioned that the market's 30% haircut on RAY tokens was “overblown” and partially due to SOL's own weakness.

"I think they are overestimating the demand for their migrated tokens and underestimating the supporting infrastructure that Raydium provides,” InfraRAY said.

"It's a high-risk, high-reward move, and I think the market is overreacting a bit to the news. But it's definitely something to keep an eye on."

Pump.Fun co-founder Alon Cohen declined to comment when reached by CoinDesk on Monday.