The Solana-based token issuance platform Pump.Fun is rumored to be launching its automated market maker (AMM) system, aiming to enhance trading efficiency and offer users new earning opportunities.
How Will the AMM System Work?
AMM is a market model that enables token transactions through smart contracts. Unlike traditional exchanges, where buyers and sellers match for transactions, the AMM system calculates prices using algorithms, allowing for trading without the need for a counterparty. The product developed by Pump.Fun, "amm.pump.fun," will incorporate not only trading functions but also deposit and withdrawal features.
Impact on Raydium and Market Reactions
Previously, when the tokens created on Pump.Fun reached a market value of $69,000, a portion of the liquidity was transferred to the Solana-based decentralized exchange Raydium. However, with the introduction of the new AMM system, tokens might now be directed towards Pump.Fun’s own pools. This shift could explain the approximately 25% decline in the value of Raydium’s native token, RAY, over the past 24 hours.
Future Developments and Earning Potential
Despite not having officially launched a token, Pump.Fun has quickly become a leading platform, accumulating over $550 million in transaction fees since March 2024 and executing $2.4 billion in volume within just two weeks.
The developing AMM system may offer transaction fees and reward mechanisms that could create additional income for users. This move by Pump.Fun is seen as a step to improve liquidity management and trading efficiency on the platform.
