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RAY, the native cryptocurrency of the Solana-based automated market maker (AMM) and liquidity provider Raydium, has plummeted by double digits due to recent developments happening on the memecoin launchpad Pump.fun.
According to data from CoinGecko, RAY is down more than 28% daily and 37% weekly. The steep fall caused the cryptocurrency to tumble from $4.3 to $3 in less than seven hours. The asset’s market cap has also fallen by roughly 30% to $884 million. At Raydium’s current price, the token is about 81% down from its September 2021 all-time high of $16.9.
Raydium was created as an AMM and liquidity provider for the decentralized exchange Serum. Although Serum became defunct after the FTX fiasco in November 2022, Raydium has become the leading AMM for Solana.
One feature that makes Raydium stand out is its combination of AMM efficiency and a central order book liquidity model. Ever since Pump.fun went live in January 2024, the memecoin launchpad has used Raydium as its AMM.
Typically, once a token’s market cap reaches $69,000, it gets listed on Raydium. This means Raydium records high network activity if there is a surge in tokens launched on Pump.fun. However, that is about to change as Pump.fun is developing its own AMM.
The pseudonymous market analyst Trenchdiver revealed in a tweet that Pump.fun developers are working on AMM liquidity pools for the protocol and testing the platform. The developers reportedly intend to have Pump.fun tokens migrate to their native liquidity pools instead of Raydium’s once they reach a certain threshold.
According to Trenchdiver, the end goal of Pump.fun’s AMM platform launch could be extracting more transaction fees on Solana or creating a mechanism that rewards token holders. Either way, this could shift significant liquidity and network activity from Raydium.
While the crypto community speculates on Pump.fun’s reasons for launching an AMM platform, it appears the memecoin launchpad will unveil more features and products before the year runs out.
There have been speculations about a potential launch of an advanced trading terminal for professional users and a native token for Pump.fun to reward early adopters. However, the pseudonymous Pump.fun co-founder Alon Cohen debunked the rumors, saying they are wrong.
The post Raydium (RAY) Falls 28% as Pump.fun Enters The AMM Landscape appeared first on Cointab.
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