Raydium Contributor Dismisses Pump.Fun's Alleged AMM Shift as a 'Tactical Blunder'

Raydium, Solana's leading automated market maker, responded on Monday to speculation that Pump.Fun, a significant driver of volume, is planning to launch its own AMM. According to InfraRAY, a core contributor to Raydium, abandoning the platform would be a 'strategic miscalculation' for Pump.Fun, which has achieved immense popularity and profitability as a memecoin factory. InfraRAY expressed doubts about Pump.Fun's ability to replicate its success if it were to replace Raydium's established liquidity pools with its own in-house trading infrastructure. The rumors led to a mass sell-off of RAY tokens over the weekend, after observers noticed Pump.Fun apparently testing its own AMM, presumably with the intention of replacing Raydium as its platform of choice. This potential move would significantly impact the economics of decentralized token trading on Solana. Currently, Raydium captures trading fees from Pump.Fun memecoins that have 'graduated' to its own pools, an arrangement in place since Pump.Fun's inception, which has been financially beneficial for Raydium. However, this arrangement also means Pump.Fun misses out on the long-term upside of the tokens its users create. Although Pump.Fun has collected half a billion dollars in fees from early-stage token launches, Raydium generates over $1 million in fees daily from trading across all its liquidity pools. With over 30% of Raydium's daily trading volume coming from Pump.Fun tokens, a significant portion of its fees could disappear if Pump.Fun switches to a different platform. InfraRAY acknowledged the potential revenue hit but described the market's 30% reduction in RAY tokens as 'overblown' and partly attributed to SOL's weakness. He warned that any shift to a new AMM could encounter numerous issues, including inadequate infrastructure, low demand for migrated tokens, and poor volume at launch. 'I think that's a real risk they are overlooking, but I could be wrong,' InfraRAY stated. Pump.Fun co-founder Alon Cohen declined to comment on the matter.