Pumpfun, a Solana-based token launch platform, is developing its AMM. This move could change the current landscape of memecoin trading.
Significance of AMM for Pumpfun
An AMM enables users to trade cryptocurrencies against liquidity pools. If successful, this system could change the practice of memecoins transitioning to Raydium, diminishing its dominance.
Risks to Raydium's Business
If Pumpfun fully integrates its AMM, it may reduce Raydium's trading volume by 30-50% and affect the RAY token price. Raydium might need to lower fees or offer new incentives.
New Features or New Risks?
Pumpfun's AMM could introduce features like memecoin perpetuals and lending pools but may also bring risks, including smart contract exploits and regulatory scrutiny. Pumpfun was previously linked to a $1.4 billion Bybit hack, raising security concerns.
If Pumpfun launches its AMM, it will not only transform Solana's memecoin market but also compel other platforms to adapt to remain competitive.
