Pump.fun is developing automated market makers to manage memecoin liquidity, potentially reshaping Solana's DEX market.
Impact of Pump.fun’s New AMM on Raydium
Currently, only 1.4% of tokens launched on Pump.fun migrate to Raydium. An in-house AMM could retain more liquidity within Pump.fun’s ecosystem, potentially reducing Raydium’s trading volume by 30% to 50%.
New Opportunities and Security Risks
The development could introduce new financial products such as memecoin perpetuals and lending. However, security concerns arise with links to the Lazarus Group, suspected in major fund thefts.
Investor Reactions and Initial Outcomes
Investors have reacted to the developments, causing Raydium’s native token, RAY, to drop 20%. Pump.fun has already gathered over $500 million in swap fees.
Pump.fun's AMM development could significantly alter Solana's DEX market. However, the platform must address security concerns to maintain investor trust.
