Source: Cointelegraph Original: "{title}"
Pump.fun has launched its own decentralized exchange (DEX) called PumpSwap, which has the potential to replace Raydium as the primary trading venue for Solana (SOL) meme coins.
Pump.fun announced on the X platform that starting from March 20, meme coins that successfully achieve initial liquidity injection (i.e., "binding") on Pump.fun will be directly migrated to PumpSwap.
Previously, bound Pump.fun tokens would migrate to Raydium, which became the most popular decentralized exchange on Solana largely due to trading activities of meme coins.
According to Pump.fun, PumpSwap "functions similarly to Raydium V4 and Uniswap V2," and is designed to "create the smoothest environment for token trading."
Pump.fun stated, "Migration was a major barrier — it slowed down the momentum of token development and created unnecessary complexity for new users."
"Now, migration can be completed instantly and for free."
Raydium's trading volume surged significantly in 2024, largely thanks to meme coins. Source: DeFiLlama
Increased Competition
The launch of Pump.fun's own exchange comes just days after Raydium revealed its plans to create a meme coin issuance platform called LaunchLab to compete directly with Pump.fun.
As meme coin trading volumes have significantly decreased from January's highs, Pump.fun and Raydium have shifted from partners to competitors, which is bound to reshape the decentralized finance (DeFi) ecosystem on Solana.
On March 20, one of Pump.fun's co-founders, Alon, told Cointelegraph, "We welcome competition because ultimately, the users benefit."
Other emerging protocols, such as Daos.fun, GoFundMeme, and Pumpkin, are also competing for a share of the Solana meme coin market.
PumpSwap plans to adopt one of its competitor GoFundMeme's most popular features, which is to share profits with meme coin creators.
Pump.fun stated that soon, "a certain percentage of protocol revenue will be shared with token creators."
"If successful, millions of dollars will be used to align creators with their community interests and incentivize higher quality token issuance."
Pump.fun's fee revenue has decreased compared to January. Source: DeFiLlama
Decline in Meme Coin Trading Activity
On February 27, Cointelegraph reported that after a series of scandals related to meme coins cooled retail traders' enthusiasm, the number of meme coins successfully issued on Pump.fun had decreased by about 80% from January's peak.
According to a spokesperson from Pump.fun and data from DeFiLlama, Pump.fun's average daily fee revenue has dropped from over $4 million in January to about $1 million as of mid-March.
According to DeFiLlama, meme coins drove explosive growth for Solana in 2024, with the total value locked (TVL) on the blockchain rising from about $1.4 billion at the beginning of the year to over $9 billion.
Data from DeFiLlama shows that Raydium was one of the biggest beneficiaries, with its daily trading volume soaring from about $245 million to over $2 billion during 2024.
In January, Raydium launched a leveraged perpetual futures trading platform in an attempt to challenge the position of another top decentralized finance protocol on Solana, Jupiter.
Related: After the meme coin bubble burst, Solana's revenue plummeted 93% from January's peak.
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