- Pump.fun tests AMM liquidity pool to reduce reliance on Raydium and keep more transaction fees within its platform.
- The platform blocks a hacker linked to the Bybit exploit while working to build stable meme token communities.
- Pump.fun aims to control trading fees and liquidity by shifting away from Raydium’s ecosystem through its own AMM.
Pump.fun is testing an automated market maker (AMM) liquidity pool on its testnet. The platform aims to reduce its reliance on Raydium as a third-party liquidity provider. This new system could improve efficiency and keep more transaction fees within the platform. Currently, only 1.4% of tokens launched on Pump.fun migrate to Raydium.
If successful, the AMM function will allow seamless migration of meme tokens from Raydium to Pump.fun’s liquidity pool. The move aligns with Pump.fun’s broader strategy to strengthen its ecosystem. The platform has already processed over $500 million in swap fees, according to DeFiLlama data.
Challenges in Ensuring Liquidity Stability
Despite these developments, Pump.fun faces challenges in maintaining liquidity stability. Meme tokens are dominating decentralized exchange (DEX) trading volumes, but their volatility is still an issue. Pump.fun is working to build sustainable communities around these tokens to support long-term market stability.
Security remains a key priority for the platform. It recently blocked an attempt by a hacker linked to the $1.46 billion Bybit exploit. The hacker had been using Pump.fun to move stolen funds by trading meme tokens. On-chain investigators found that $1.08 million from the Bybit hack was converted into meme tokens and spread across multiple blockchains before Pump.fun intervened.
Potential Impact on Raydium’s Ecosystem
Pump.fun currently matches trades through its internal market. When the internal liquidity pool is full, trades are routed to Raydium’s liquidity pool. This process requires Pump.fun to pay transaction fees to Raydium’s liquidity providers.
Raydium is a major AMM platform within the Solana ecosystem. Its liquidity pools support many Solana-based projects, and its total value locked (TVL) consistently ranks among the top on the network. If Pump.fun successfully establishes its own AMM, it could take liquidity away from Raydium. This shift may impact Raydium’s revenue model and overall market position.
The success of Pump.fun’s strategy will determine whether it can fully control trading fees and liquidity distribution within its platform.
