Pump.fun has launched its own decentralized exchange (DEX) called PumpSwap, potentially displacing Raydium as the primary trading venue for Solana (SOL) memecoins. 

Starting on March 20, memecoins that successfully bootstrap liquidity, or “bond,” on Pump.fun will migrate directly to PumpSwap, Pump.fun said in an X post. 

Previously, bonded Pump.fun tokens migrated to Raydium, which emerged as Solana’s most popular DEX largely thanks to memecoins trading activity. 

According to Pump.fun, PumpSwap “functions similarly to Raydium V4 & Uniswap V2” and is designed “to create the most frictionless environment for trading coins.”

“[M]igrations were a major point of friction – they slow a coin’s momentum and introduce needless complexity for new users,” Pump.fun said.

“[N]ow, migrations happen instantly and for free.”

Raydium’s trading volumes surged in 2024, largely due to memecoins. Source: DeFiLlama

Related: Solana shorts spike amid memecoin scandals

Heightened competition

The launch comes just a few days after Raydium tipped plans to create its own memecoin launchpad — called LaunchLab — to directly compete with Pump.fun. 

Pump.fun and Raydium’s transition from partners to competitors stands to reshape Solana’s decentralized finance (DeFi) ecosystem at a time when memecoin trading volumes are down dramatically from January highs. 

“We welcome competition because users win at the end of the day,” Alon, one of Pump.fun’s co-founders told Cointelegraph on March 20. 

Other upstart protocols — such as Daos.fun, GoFundMeme and Pumpkin — are also vying for a share of Solana’s memecoin market. 

PumpSwap plans to adopt one of rival GoFundMeme’s most popular features — revenue sharing with memecoin creators. 

Soon, “a percentage of protocol revenue will be shared with coin creators,” Pump.fun said.

“[I]f it succeeds, millions of dollars will go towards aligning creators with their communities and incentivizing higher quality launches.” 

Pump.fun’s fee revenues are down sharply from January highs. Source: Dune Analytics

Declining memecoin activity

On Feb. 27, Cointelegraph reported that successful memecoin launches on Pump.fun were down some 80% from January highs after a series of memecoin-related scandals cooled sentiment among retail traders. 

As a result, Pump.fun’s average daily fee revenue declined from more than $4 million in January to just over $100,000 as of mid-March, according to data from Dune Analytics,

Memecoins drove explosive growth on Solana in 2024, with the chain’s total value locked (TVL) increasing from around $1.4 billion to more than $9 billion that year, according to DefiLlama.

Raydium was among the biggest beneficiaries, with daily volumes soaring from around $245 million to more than $2 billion over the course of 2024, DefiLlama data shows.

In January, Raydium launched a leveraged perpetual futures trading platform in a bid to challenge incumbent Jupiter, another top Solana DeFi protocol.

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