PumpFun, the popular Solana-based token launchpad, has introduced its decentralized exchange PumpSwap to streamline token migrations and enhance liquidity.
What is PumpSwap?
PumpSwap is a Solana-native decentralized exchange designed to facilitate trading of meme coins and other SOL-based assets. It operates using an Automated Market Maker (AMM) model, similar to Raydium V4 and Uniswap V2, where users provide liquidity and trade tokens. The platform charges a 0.25% trading fee, with 0.20% going to liquidity providers and 0.05% to the protocol. PumpFun has hinted at a new Creator Revenue Sharing Model, potentially offering significant incentives for token developers. On launch, PumpSwap supports tokens like USDe, PENGU, SEI, Jupiter (JUP), and Wormhole (W).
Why PumpSwap?
Before PumpSwap, tokens launched on PumpFun had to migrate to Raydium for trading, slowing down momentum and adding complexity. With PumpSwap, migrations now occur instantly and for free, with tokens automatically transitioning after their bonding curve on PumpFun. This move could impact Raydium, which has benefited from high trading volumes driven by PumpFun tokens.
Can PumpSwap Revive the Memecoin Market?
Despite the excitement around PumpSwap, the memecoin market has been struggling. After peaking at $206 billion in January trading volume, it fell to $99.5 billion in February. PumpFun faced revenue declines as well, earning 588,478 SOL ($60M) in January but seeing a 50% drop the following month. The introduction of PumpSwap appears to be a strategic move to sustain growth as meme coin hype cools.
PumpSwap's launch aims to address token migration friction and boost liquidity, positioning PumpFun as a key player in Solana's evolving DeFi ecosystem.
