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Raydium

<a style="text-decoration:none" href="https://bsc.news/post/what-is-pump-fun">PumpFun</a>, the popular&nbsp;<a style="text-decoration:none" href="https://bsc.news/post/solana-blockchain-ecosystem-deep-dive">Solana</a>-based token launchpad,&nbsp;<a style="text-decoration:none" href="https://x.com/pumpdotfun/status/1902762309950292010">introduced</a> its own decentralized exchange (DEX),&nbsp;PumpSwap.&nbsp;
With PumpSwap, PumpFun aims to eliminate friction in token migrations, reduce reliance on third-party DEXs, and enhance liquidity for newly launched tokens.&nbsp;
But will this move challenge&nbsp;Raydium’s dominance? And can it revive the fading&nbsp;<a style="text-decoration:none" href="https://bsc.news/post/what-are-memecoins-guide-how-they-work-2025">memecoin</a> hype?
<h2 dir="ltr" id="span-span-strong-what-is-pumpswap-strong-span-span">What is PumpSwap?</h2>
PumpSwap is a&nbsp;Solana-native decentralized exchange built to streamline trading for meme coins and other SOL-based assets. It operates similarly to&nbsp;Raydium V4 and Uniswap V2, using an&nbsp;Automated Market Maker (AMM) model where users provide liquidity and trade tokens.
The platform charges a&nbsp;0.25% trading fee, allocating&nbsp;0.20% to liquidity providers and&nbsp;0.05% to the protocol. However, PumpFun has hinted at a new&nbsp;Creator Revenue Sharing Model, which would distribute a portion of protocol revenue to coin creators. If implemented successfully, this could generate millions in incentives for token developers, potentially&nbsp;raising the quality of new projects.
On launch, PumpSwap supports several notable tokens, including:
<ul>
 <li>USDe (a stablecoin)</li>
 <li>PENGU (from Pudgy Penguins)</li>
 <li>SEI</li>
 <li>Jupiter (JUP)</li>
 <li>Wormhole (W)</li>
</ul>
Users can trade these tokens immediately or create liquidity pools for&nbsp;newly launched tokens. However, tokens that weren’t launched on PumpFun&nbsp;must have a liquidity pool created before trading.
Per reports, PumpFun underwent&nbsp;nine independent security audits before launch and plans to&nbsp;open-source the PumpSwap code to ensure transparency. Additionally, PumpFun is hosting an&nbsp;audit competition with a $2 million reward, encouraging developers to test for vulnerabilities.
<h2 dir="ltr" id="span-span-strong-why-pumpswap-strong-span-span">Why PumpSwap&nbsp;</h2>
Before PumpSwap, tokens launched on PumpFun had to&nbsp;migrate to Raydium for trading. This process slowed momentum, introduced unnecessary complexity, and limited control over liquidity. PumpFun acknowledged this issue, stating that migrations were a&nbsp;“major point of friction” that hindered user experience.
Now, with PumpSwap, token migrations reportedly happen&nbsp;instantly and for free. Tokens that complete their&nbsp;bonding curve on PumpFun will automatically transition to PumpSwap without requiring manual intervention.
This shift could impact&nbsp;Raydium, which has benefited from&nbsp;high trading volumes driven by PumpFun tokens. With a large chunk of liquidity potentially moving to PumpSwap, Raydium might lose its dominance over Solana’s meme coin market.
<h2 dir="ltr" id="span-span-strong-the-memecoin-market-can-pumpswap-revive-it-strong-span-span">The Memecoin Market: Can PumpSwap Revive It?</h2>
Despite the excitement around PumpSwap, the&nbsp;memecoin market has been struggling. After peaking at&nbsp;$206 billion in trading volume in January, memecoin trading fell to&nbsp;$99.5 billion in February, following the LIBRA scandal.
PumpFun itself has faced&nbsp;revenue declines, earning&nbsp;588,478 SOL ($60M) in January, but seeing a&nbsp;50% drop in the following month. Despite this, it remains&nbsp;Solana’s seventh-largest protocol by revenue.
The introduction of PumpSwap appears to be&nbsp;a strategic move to sustain growth as meme coin hype cools. By keeping liquidity within its own ecosystem and offering&nbsp;revenue-sharing incentives, PumpFun positions itself as a long-term player in Solana’s evolving DeFi space.
PumpSwap’s launch comes just days after&nbsp;Raydium&nbsp;<a style="text-decoration:none" href="https://bsc.news/post/raydium-to-launch-memecoin-rival-to-challenge-pump-fun">announced LaunchLab</a>, a token generator similar to PumpFun.&nbsp;

PumpFun Introduces PumpSwap to Challenge Raydium

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