Raydium in Trouble? Pump.fun’s AMM Test Shakes Solana DEX Market

- Pump.fun, Testing AMM - Attention on Radium Replacement Possibility and Technical Changes [Unblock Media] The Solana-based meme coin issuance platform Pump.fun is testing its own AMM solution which could replace the existing automated market maker, Radium. This was reported by the economic news feed AggrNews on the 24th. This test is expected to bring significant changes to the liquidity structure of decentralized exchanges within the Solana ecosystem. Pump.fun has operated a structure where meme coins that meet certain market capitalization criteria are automatically listed on Radium. Through this process, they have been able to naturally secure liquidity for new coins, referred to as "graduate" tokens within the community. However, it is expected that this structure will change with the introduction of its own AMM, reducing dependency on Radium. The key focus of this test is whether Pump.fun can secure the trading speed, fee competitiveness, and liquidity management efficiency necessary to replace the existing role of Radium. Currently, the Pump.fun platform operates a revenue model that charges a 1% transaction fee and a cost of 6 SOL for new listings, with cumulative transaction fee revenue exceeding $500 million. This operational experience is likely to significantly impact the design of the new AMM. "Pump.fun has already earned 3M SOL from 8M token launches, and now they’re testing their own AMM," noted Subin An (@subinium) on X, highlighting the platform’s dominance in Solana's DEX market. The major technical improvements that Pump.fun's own AMM is expected to provide include enhanced transaction speed and reduced fees. Designed based on Solana's high-speed transactions, this AMM could offer faster execution speeds and lower fees compared to Radium. Additionally, if automatic liquidity provisioning and variable fee structures are introduced, it will enable more efficient liquidity supply than existing AMMs. Through this, Pump.fun can operate flexible liquidity pools within its own AMM, securing differentiation from Radium. Radium has maintained its trading volume through the liquidity of meme coins automatically listed via Pump.fun. However, if Pump.fun provides liquidity directly through its own AMM, the influx of new coins to Radium is likely to decrease. This could lead to a decrease in transaction volume and fee revenue for Radium, potentially resulting in a long-term decline in Radium's market share. Therefore, Radium needs to consider differentiated liquidity strategies and new revenue models. The introduction of Pump.fun's AMM is expected to bring overall changes to the Solana-based decentralized exchange market. As competition among various AMM solutions intensifies, users will be offered more choices. This could have a positive effect of increasing overall liquidity and promoting trading activity within the Solana ecosystem. If Pump.fun realizes high efficiency and low costs through its own AMM, other projects within the Solana network may benchmark this or introduce new AMM models. This could eventually accelerate technological advancements in the decentralized exchange market. There has been no official announcement yet regarding the schedule or operational details of Pump.fun's AMM introduction, but the significance of this test is substantial. If Pump.fun successfully launches its own AMM, there is a possibility of reduced transaction costs within the Solana ecosystem. As competition with Radium intensifies, existing decentralized trading platforms are likely to unveil differentiated strategies. The introduction of new liquidity supply methods and revenue models could accelerate the overall innovation of the AMM market. Ultimately, the key question is whether Pump.fun's AMM can secure enough competitiveness to replace the existing Radium. Depending on the results of this test, the dynamics of the Solana decentralized exchange market could change significantly, drawing considerable attention.