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

Sure, I can handle this article.

The headline is: "Pump.Fun Testing Its Own AMM Solution...Possibility of Replacing Raydium Grows"

@Mark, the article reports that Solana-based Pump.Fun is testing a new AMM solution. I believe this falls within your expertise.

Alright, let's start the research.

Aha, according to this article, Pump.fun is testing its own automated market maker (AMM) solution that could potentially replace the existing AMM, Raydium. This suggests that a significant change might occur for the Solana (SOL) based meme coin issuance platform.

Previously, Pump.fun has been operating in a way where meme coins that meet a certain market cap criteria are automatically listed on Raydium. This method has been significant in naturally forming liquidity within the Pump.fun ecosystem, often referred to within the community as 'graduation' tokens. However, with the introduction of its own AMM, this listing procedure could change, potentially lowering the dependence on Raydium.

Pump.fun is an influential platform within the Solana ecosystem. Its accumulated transaction fee revenue has surpassed $500 million, maintaining a fee structure of 1%, and 6 SOL is charged upon new listings. This revenue model has contributed to establishing Pump.fun as one of the significant DEXs within the Solana network.

Nonetheless, Raydium has secured liquidity for meme coins automatically listed via Pump.fun, and if Pump.fun begins operating its own AMM, there is a high possibility that the liquidity of new meme coins will no longer flow into Raydium. This could lead to a decrease in Raydium's trading volume and fee revenue, acting as a negative factor for Raydium.

Although the specific timing and detailed operations of Pump.fun's AMM implementation have not been disclosed, the fact that it is in testing suggests that it could bring significant changes to the DEX market within the Solana ecosystem.

This could lead to the emergence of various AMM solutions, increasing competition, and providing users with a wider range of choices. Such changes might also positively impact the Solana ecosystem’s liquidity and trading activity.

Mark,

I'll share the results of my review of the analysis. There are a few important points to mention.

First, the fact that Pump.fun is testing its own AMM solution as a potential replacement for Raydium has been well-emphasized. This is a significant fact that could bring major changes to the Solana ecosystem. However, there are some areas that need supplementary details.

Firstly, there is a lack of explanation regarding the technical advantages of introducing Pump.fun's AMM. Simply stating that dependency on Raydium will decrease might not be sufficient for readers to fully grasp the situation. For example, adding details such as "Pump.fun's own AMM solution is superior to Raydium in terms of transaction speed and fee reduction" would be helpful.

Secondly, you need to clarify the technical impact of the changing relationship between Raydium and Pump.fun. While the current explanation mentions that Raydium will be impacted by reduced liquidity, it would be more elucidative to detail how "the liquidity management approach that Pump.fun can offer through its own AMM will affect Raydium's existing strategy, and how Raydium is expected to respond to these changes."

Lastly, it's necessary to provide a more multifaceted analysis of the impact on the entire Solana ecosystem. For example, discussing points like "how the emergence of various AMM solutions can improve user experience and potentially increase the overall transaction volume on Solana" would add depth to the analysis.

There are just a few parts that need to be supplemented, around three main points. Please make the revisions and resubmit the analysis.

I appreciate your attention to these modifications.

This article has been finally approved. @olive, please create a representative image for the article.

The summary sentence is well written. It clearly and concisely conveys the key information. The flow between paragraphs is also natural. Each paragraph is logically connected, making it easy for the reader to understand.

Overall, this is a very well-written article. Please continue to do such a good job in the future.