Can there be a winner after Raydium and Pump.fun imitate each other and "break up"?

Author: flowie, ChainCatcher

After "going solo" with AMM on Pump.fun, Raydium has started to fight back. This morning, according to Blockworks, Raydium launched a meme coin launch platform called LaunchLab, similar to Pump.fun.

Perhaps influenced by this news, the Raydium token, Ray, surged by about 30% to $2.07, before retreating to around $1.80 at the time of writing.

However, after the meme craze in the Solana ecosystem subsides, will there be a winner in the "breakup" between Raydium and Pump.fun?

There May Have Been Doubts Early On

The LaunchLab launched by Raydium is essentially a fork of Pump.fun, but with optimizations and improvements. For example, unlike Pump.fun, which only supports SOL as a quote token, LaunchLab will support multiple quote tokens, providing users with more options.

Raydium's move to integrate Pump.fun may seem like a forced counterattack, but there may have been doubts early on.

Raydium core contributor Infra mentioned in an interview with Blockworks that development on LaunchLab began "months ago," but it was put on hold because "we didn't want the team to feel that Raydium was directly competing with them."

However, with Pump.fun's AMM plans coming to light, Raydium may have decided to stop pretending.

During this meme craze, Pump.fun and Raydium were arguably the best "partners."

Pump.fun's token issuance mechanism is divided into "internal" and "external" markets. When the trading volume of tokens issued on Pump.fun reaches $69,000, it enters the "external" trading phase.

The external trading primarily relies on Raydium, which provides deep liquidity pools and stability to help tokens on Pump.fun trade better. However, Raydium charges a 0.25% fee on each transaction, which means Pump.fun has to pay substantial fees.

As a leading AMM platform in the Solana ecosystem, it can be said that due to the boom of memes and Pump.fun, Raydium has made a significant profit over the past year.

The "2024 Memecoin Annual Consumption Report" shows that meme coin trading in the Solana ecosystem generated at least over $3.093 billion in fees in 2024. Among them, Raydium earned over $1 billion, while Pump.fun only earned $240 million.

However, last month, as Pump.fun launched its own AMM in an attempt to break free from Raydium's dependency, Raydium's passive income model was disrupted. As a result, Ray's token price dropped by over 20% on that day.

The purpose of Pump.fun's self-built AMM is also clear: to keep the money that Raydium would have earned for itself. Additionally, after building its own AMM, Pump.fun can fully control the rules and fee distribution of the liquidity pool, potentially giving it stronger control over users.

As the biggest beneficiary of Pump.fun, its going solo indeed has a huge impact on Raydium's revenue.

According to data from Blockworks Research, in the past 30 days, meme coins from Pump.fun accounted for 41% of Raydium's trading fee revenue.

Fortunately, Raydium has indeed made money. After experiencing a significant drop and the threat of Pump.fun going solo, data from Blockworks Research indicates that Raydium still has about $168 million in its balance sheet, which can support its attempts to create a new meme launch platform.

Difficult Brothers: Can There Be a Winner After the "Breakup"?

The recent meme craze in the Solana ecosystem has receded, and market attention has temporarily shifted to Binance's BSC chain.

Both Raydium and Pump.fun have significantly fallen from their peaks.

According to DeFillam data, Raydium's TVL has dropped about 60% from its peak of $2.7 billion at the end of January to $1.1 billion, and daily trading fees have also plummeted over 90% from $10 million at the end of January to around $800,000; the token price has fallen over 75% from its peak of $7.60 to around $1.80.

Pump.fun's trading fees have also dropped over 95% from their peak of $15 million to $800,000. Yesterday, according to Lookonchain monitoring, there was only one token on Pump.fun with a market cap exceeding $1 million within 24 hours.

Perhaps due to the significant decline in revenue and the difficulty of making money, neither Pump.fun nor Raydium wants to let the other profit.

However, after both have created similar products, can there be a winner between the two difficult brothers?

Currently, the reality is that the overall market is sluggish, and the market has been somewhat fatigued after a long period of PVP. The attention on Solana ecosystem memes has also shifted to the BSC chain. With demand waning, it seems difficult for Pump.fun and Raydium to achieve remarkable results.

On the other hand, is the other's business really that easy to do? After Pump.fun built its own AMM, it was also questioned by Raydium. Raydium's core contributor Infra stated on the X platform in a post that Pump.fun's complete abandonment of Raydium is a "strategic misjudgment."

Infra believes that Pump.fun has underestimated the value brought by Raydium's liquidity support, and questions whether users have enough motivation to migrate to Pump.fun's new AMM given Raydium's dominant position in Solana.

However, for Raydium, Pump.fun has already established a strong user base and brand recognition in the Solana ecosystem, creating user stickiness through "foolproof" operations and social interactions. It is not easy for Raydium to make its token platform more attractive in a short time. Additionally, Pump.fun has been criticized for a large number of worthless tokens that cannot graduate, and if Raydium's LaunchLab adopts a similar low-threshold token creation mechanism, it will face similar scrutiny.

Currently, from the reactions of Twitter users, it seems that after the shift in attention, the mutual competition between Pump.fun and Raydium has not attracted much attention, and it is temporarily difficult to conclude who wins and who loses.

Crypto KOL Jeremy and SonicSVM BD head Arif Kazi, among others, believe that regardless of how the competition between the two unfolds, users are the real winners, as it may lead to lower fees or better innovations.