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Pump.fun Unveils PumpSwap DEX, Challenges Raydium with Novel Token Migration Strategy
- Pump.fun has launched PumpSwap—a new DEX on Solana designed to streamline token migrations by eliminating the 6 SOL fee.
- PumpSwap uses an AMM similar to Raydium V4/Uniswap V2, allowing free liquidity pool creation and charging a 0.25% fee per swap.
- This comes as the platform struggles with declining monthly revenues.
As Pump.fun struggles with declining monthly revenue (around 60%), the memecoin generator has decided to launch PumpSwap, a new decentralised exchange (DEX) on Solana.
As per the announcement, the PumpSwap interface functions similarly to Raydium V4 and Uniswap V2, using an automated market maker (AMM) algorithm with a constant product formula.
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This translates into the following: users can create new liquidity pools at no cost, join existing pools, and trade any tokens listed on the platform. Each swap incurs a 0.25% fee: 0.20% goes to liquidity providers, and 0.05% goes to Pump.fun.
The team also said it plans to launch a Creator Revenue Sharing feature to distribute a portion of protocol fees to token creators, with the aim of encouraging higher-quality launches.
Funny enough, Raydium recently disclosed its plans to launch its own memecoin launchpad, as first reported by crypto outlet Blockworks. It’s called LaunchLab, and it signals a shift from partner to rival status, highlighting the ongoing race to attract memecoin projects on Solana.
Even more funny is that Pump.fun will not direct liquidity to Raydium, but tokens that complete their bonding curve will now migrate directly to PumpSwap, removing the 6 SOL migration fee.
Promoting Frictionless Trading
Pump.fun describes the new setup as promoting “the most frictionless environment for trading coins”, eliminating manual steps or fees that previously slowed migration processes.
In a March 20 X post, Pump.fun said that migrations were a “major point of friction.”
Migrations were a major point of friction — they slow a coin’s momentum and introduce needless complexity for new users.
pump.fun These advancements come in an attempt to save monthly revenues, given that the platform’s 30-day revenue fell by more than 50% in SOL terms from mid-January to mid-February, mirroring a broader decline in memecoin trading volumes.
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Not just bad volumes, but bad luck as well. Pump.fun’s X account recently got hacked and used to promote fake governance tokens, hitting the platform’s reputation.
Related: Fed Rate Hold Sparks Crypto Rally Despite Analyst Warnings of Premature Optimism
Author
José Oramas
José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.
