Raydium’s RAY Plummets Amid Pump.fun AMM Speculation

Raydium’s RAY token nosedived 22% on Sunday, sinking to $3.28, as speculation swirled that meme coin launchpad Pump.fun is developing its own automated market-making (AMM) system.

According to GeckoTerminal data, RAY’s decline accelerated in the last hour, dropping an additional 5% amid uncertainty over its role in Solana’s trading ecosystem.

Neither Pump.fun nor Raydium have responded to Decrypt’s requests for comment on the matter.

Pump.fun AMM Discovery Sparks Sell-Off

The sharp decline follows the discovery of a test version of an AMM, suggesting Pump.fun may soon compete directly with Raydium.

“Raydium has benefited significantly from Pump.fun, as graduated tokens have historically migrated to its AMM, where it charges a 0.25% fee on swaps,”
— Min Jung, Analyst at Presto Research

Automated market makers (AMMs) are decentralized trading systems that replace traditional order books with liquidity pools and algorithmic pricing.

Users deposit assets into shared pools, and the AMM automatically adjusts prices based on supply and demand, ensuring continuous trading without intermediaries.

Internal testing by Decrypt indicates that the test AMM site’s security certificates are legitimate, linking to Pump.fun’s platform. However, the domain lookup tool did not reflect a proper DNS record, suggesting the feature is still in testing.

Raydium’s Market Position at Risk?

If Pump.fun launches its own AMM, Raydium could see significant trade volume losses, impacting its fee revenue and liquidity dominance.

“If Pump.fun is indeed developing its own AMM, this could reduce future swap volumes on Raydium, leading to lower fee revenue,”
— Jung added.

Currently, projects pay 6 SOL (~$950) to graduate their tokens to Raydium’s more liquid trading pools. If Pump.fun lowers its fees, it could become a more attractive option for new token listings.

A footer reference in Section 4 of the test site’s terms and conditions suggests that Pump.fun’s AMM may introduce competitive trading fees, but specific details remain unknown.

Pump.fun’s Meteoric Growth & Its Impact on Raydium

Pump.fun has exploded in popularity, processing over $5.3 million in daily fees at its peak. However, despite this massive transaction volume, only 1.4% of tokens launched on Pump.fun make it to Raydium’s pools.

Even fewer—less than 100 tokens—reach a $1 million market capitalization.

While Raydium remains the dominant AMM for Solana-based assets, the rise of Pump.fun’s potential market-making solution could shift trading behavior, forcing Raydium to adapt or risk losing ground.

With speculation mounting, RAY’s price continues to react sharply, and traders are watching closely for official confirmation from either Raydium or Pump.fun.